'Pension dashboards pause must not become a permanent stop'

Pension dashboards are a massive cross-industry project to enable pension savers to see all their pensions safely online in one place. It will only work if it covers all pension schemes, including the state pension. That includes online investment platforms, but also public sector schemes and legacy pensions where data quality may be patchier.

This was never going to be an easy ride but the project seemed to be bouncing along nicely.

In a flurry of regulation last year, the Department for Work and Pensions and Financial Conduct Authority set out that the biggest workplace pension schemes and personal pensions had to connect to the central digital architecture by the end of August 2023. Pension dashboards would then be turned on for the general public to access in late 2024.

Dashboards need to make sure that the people who log on are who they say they. Otherwise, it will turn into the scammers’ charter many have been warning against.

In a shock announcement, Trott said the implementation of pension dashboards will be reset in the summer. Although the DWP is still committed to the project, it was growing increasingly evident the ambitious timescales could never have been met. There are still too many niggly problems.

This is a disappointing and frustrating setback. If they work well, pension dashboards have the potential to galvanise pension saving in this country. People could see at a glance what pension savings they have and where. Through ‘post-view services’ they could work out how much income they want in later life, and how much more they need to achieve that goal. 

Pension dashboards could have encouraged ownership, higher contributions, better investment decisions, consolidation for lower charges, and engagement with retirement decisions. The list goes on and on. 

So, what needs to change to get pensions dashboards to work?

The biggest issue is security. The dashboards need to make sure that the people who log on are who they say they are and the pension schemes need to have the right data to be sure they are sending the right information to the right people. Otherwise, it will turn into the scammers’ charter many have been warning against.

So far, the Pensions Dashboards Programme has been left out in the cold when it comes to using the government systems already established to check identity. This needs to change. Identification needs to verify national insurance numbers. After all, this is one of the main ways pension schemes identify their members, and a scheme check without a verified NI number is on a hiding to nothing.

Pension dashboards have the potential to solve many problems in the pensions industry, most of which stem from a lack of engagement.

We need more focus on the consumer journey. Both the FCA and PDP are acting as regulators, each individually setting warnings and rules on how information is displayed. Has anyone looked at this from the pension saver’s point of view? I would argue two regulators is too many – you can have too much of a good thing. 

Finally, we need a published strategy. Pension dashboards have the potential to solve many problems in the pensions industry, most of which stem from a lack of engagement.

But we need a clear direction of where the DWP intends to take this project. This first phase of dashboards is certainly not the last, so it needs to let the rest of us in on what future phases could look like.

Pension dashboards could change pension engagement forever, but they need to be safe, and the DWP must take advantage of this pause in proceedings to make these vital changes. What it cannot do is lose sight of the end goal and let either practical difficulties or a change in government make this pause a permanent stop.

Rachel Vahey is head of policy development at AJ Bell