Pension Dashboard  

Pension dashboard 'must include' Lifetime Isas

Pension dashboard 'must include' Lifetime Isas

The scope of the pension dashboard project must be widened to include other investment wrappers, ahead of the likely emergence of the Lifetime Isa as an alternative to pensions, fintech firm EValue has argued.

The firm's founder and strategy director Bruce Moss welcomed the current project as a "first step", but warned its current scope was too narrow.

He claimed the Lifetime Isa, or Lisa - a government-subsidised savings vehicle with the dual purpose of saving for a first home deposit and for retirement - would see pensions playing a "reduced role in consumers' retirement plans".

As such, Lisas, which will available from April, would need to be included on the pension dashboard.

Current plans for the pension dashboard, however, focus exclusively on pensions, and are in their early stages.

Origo, the fintech company owned by a group of life insurance companies, is in the process of building a "prototype" pension dashboard under the auspices of the Association of British Insurers, which it will demonstrate to Treasury at the end of March.

Mr Moss said this initial dashboard would provide financial advisers with much more comprehensive information on their clients' investments, overcoming "one of the major barriers" to providing good advice.

But he said more was needed.

"[E]ven when the dashboard is fully operational it will only be part of what is needed as pensions play a reduced role in consumers’ retirement plans, as Isas and Lifetime Isas become more prevalent," he said.

"Today, retirement planning involves more than simply looking at pensions and it’s important a person’s full financial picture is taken into account to ensure they get the guidance and advice they really need."

A spokesperson for the ABI said the work currently being done by Origo would act as a "springboard" to other developments, and could eventually be extended to Isas and other investments.

When former chancellor George Osborne announced the Lifetime Isa in last year's March budget, it was viewed as a watered down version of his much more controversial idea for a "pension Isa". 

But despite its £4,000 a year annual limit (compared to £40,000 a year for pensions), and the fact that employers cannot contribute to it, the pensions industry has viewed the Lisa as a direct challenge to pensions, in particular to auto-enrolment.

Prominent critics include two former pensions ministers, Sir Steve Webb and Baroness (Ros) Altmann.

As a result of this opposition, very few pension providers have committed to offering a Lisa.

Only two - Hargreaves Lansdown and The Share Centre - have publicly confirmed they will have a product ready for market in April, while mutual OneFamily has said it is "exploring" the market.

The Lisa can only be opened by people under 40, meaning it is off limits for most financial advisers, whose clients are generally over 40.