The pensions dashboard is a much needed, and long overdue, service that will help give consumers much greater control over their retirement savings and, ultimately, ensure they have more comfortable retirements.
Not only will it show consumers how much they have saved for retirement, and where it is, but by collating the information advisers would normally collect in a fact find this could also bring down the cost of advice and allow advisers to service more consumers, including those with smaller pots.
LV= has long been an advocate of the dashboard and the need to improve consumer outcomes at retirement, particularly by encouraging the take up of advice.
We are one of the contributors to the prototype project, being managed by the Association of British Insurers, and part of the working group so we’re pleased to say the prototype is all on track to be demonstrated to the working group in March.
There has been much speculation about what will, or won’t, be created by this project. Essentially, the prototype will demonstrate how the technology that sits behind a dashboard could be implemented but it is not going to have fully functioning capability the public can try out, partly because of data protection issues that will be resolved for the final dashboard.
During April and May it will be presented to a range of stakeholders to get their feedback and understand what further work is needed, which will be vital to the initiative’s future success.
The government must provide the working group with a clear indication of what is anticipated in the next phase, how it is to be managed and set out stringent timescales.
LV= has repeatedly said that the industry should aim to deliver the dashboard much earlier than the current 2019 deadline as much of the information can already be provided to advisers in a matter of seconds, but that requires making progress on areas such as regulation.
It’s also vital that government makes it compulsory for providers and schemes to take part if participation is slow, as otherwise the dashboard is going to be ineffective and benefit far fewer consumers than it has capacity to help.
We also need to start discussing who will pay for it. The most obvious option is to ask the industry to cover costs.
While LV= would support this, we believe this structure would need to be managed in a fair way to ensure that those that get involved at a later stage, for example legacy products or occupational schemes, do make a fair contribution. Otherwise, there is a risk that providers will drag their heels simply to avoid costs.
Another option would be for the new single financial guidance body to cover part of the cost. It’s critical the new body gets involved, given its role in improving financial capability, and we believe it could even take responsibility for overseeing and promoting the dashboard.