The UK pensions industry is still patiently awaiting the kind of digital facelift that other areas of personal finance have benefitted from for years. Having taken a back seat to the digital innovation that has seen services like digital banking, investment platforms and now robo-advice revolutionise financial services, the prospect of successfully delivering the pensions dashboard could be similarly transformative for the pensions industry.
Announced in the 2016 Budget following the Financial Advice Market Review’s recommendation, the project is a joint effort from HM Treasury, the Department for Work and Pensions, the Association of British Insurers (ABI), 17 pension firms (so far) and a variety of technology outfits.
It aims to give consumers a single, unified overview of their pension pots – be they workplace, private or state – with the idea of helping savers better understand how much, or how little, they have stashed away for retirement. As Chart 1 and Chart 2 show, a sizeable proportion of consumers remain in the dark on these issues.
Since the initial announcement, the team behind the dashboard has launched a prototype – a model unveiled to the public in April that demonstrates the core functions of the service – but the final version is not expected until 2019.
As shown in the prototype demonstration video on the Pensions Dashboard project website, the main features include: enabling consumers to verify their identities through the gov.uk/verify system; giving all participating providers and schemes access to that data (with the customer’s permission); and returning all relevant pensions data (including the estimated value of pension pots at retirement age) to the dashboard for the consumer to see.
The dashboard will also enable customers to see scheme- or provider-specific information, as opposed to being presented solely with accumulated pension savings information.
However, despite the punctual delivery of the prototype, the prospect of an on-schedule launch of the dashboard in 2019, as set out in the Financial Advice Market Review (FAMR), has been thrown into question given recent political developments.
As well as stifling government input in the project, the snap election saw former economic secretary to the Treasury, Simon Kirby, lose his Brighton seat to Labour MP Lloyd Russell-Moyle. Mr Kirby had played a central role in the team responsible for ensuring the successful launch of the project.
Meanwhile, former pensions minister Richard Harrington retained his seat, but has also been replaced in the role following the election.
Although replacements are being announced for either role, it is feared that some of the objectives touted by Mr Kirby, such as the prospect of legislating for mandatory provider participation, could be thwarted.
