Pension Dashboard  

We must avoid a 'Great Stink' in pensions

Adrian Boulding

Adrian Boulding

This year is the bicentenary of the birth of Sir Joseph Bazalgette, one of the greatest of the Victorian engineers and there were many of them. 

Sir Joseph is famous for the creation of an efficient network of brick-built sewers across London.

With amazing foresight, he created a system with enough spare capacity that it is still in use today, despite the population of our capital city more than doubling since the network opened.

And because much of London is low lying, he added pumping stations at strategic intervals, to help move everything along.

These buildings are themselves works of art and today Crossness pumping station, locally known as the Cathedral on the Marsh, is Grade 1 listed on account of its ornate cast iron interior.

It is well worth a visit, as is Sir Joseph's  Acton Mills pumping station, built in the Italianate-Gothic style and worth every penny of its Grade II listing.

Of course, for all his artistic flourishes, Sir Joseph was at heart an engineer and he was responding to a government commission.

The “Great Stink” of the Summer of 1858 meant that Parliamentarians could no longer carry on working next to the River Thames, which until then had basically been London’s main sewer - something had to be done.

Thanks to Sir Joseph's great works, ‘agricultural’ smells became largely a thing of the past in London.

Auto-enrolment has created something of a similar problem for twenty first century pensions.

Such is the success of Auto Enrolment (AE) that over 10m hitherto un-pensioned employees have been put into workplace pension schemes, all supported by small contributions from their employer and their own pay.

However, there is a reason why employers had not previously pensioned this group – they change jobs amazingly frequently.

The Department of Work and Pensions’ own analysis of this labour market segment shows that of the 10m, 170,000 of them change jobs every month. 

And what do they do? They just stand up and walk away - leaving a small deferred pot behind them.

So, before we have our own AE-linked “Great Stink”, we need a way for the pension pots to be able to keep track of their owners.

Hopefully the Pensions Dashboard will do this, and hopefully the technology-driven plumbing of the Pensions Dashboard will be as beautiful and far-sighted as Sir Joseph's was.

To keep a lid on the numbers of small pots, I believe that the Pensions Dashboard needs a really easy transfer facility.

For the little ones, say pots under £5,000, the Dashboard should have a simple ‘drag and drop’ capability, so that when an owner does pay a visit to the site they can simply use the mouse to pick up their small, hitherto discarded, pensions and consolidate them with whichever pension they choose as their main scheme, after first checking that they are not consolidating into the highest charging scheme.