OpinionAug 1 2018

Lights out for pensions dashboard?

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Lights out for pensions dashboard?
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In the face of the humanitarian crisis that our leaders are anticipating, it may seem forgivable for less important issues to be kicked into the long grass. 

But it is not forgivable.

A government must be able to deal with all the different issues facing it and, while it may prioritise certain things in the face of an emergency, that does not mean work in other areas should cease.

A typical worker has 11 employers during their career which means they could have 11 different pension pots.

So the report that MP Esther McVey, the work and pensions secretary, is thinking of ditching the pensions dashboard is concerning. 

The dashboard, as we all know, would allow people to see all their retirement savings in one place.

It is much needed. A typical worker has 11 employers during their career which means they could have 11 different pension pots.

Keeping track of them is not easy, especially when people move home reasonably frequently and firms go bust. And with a lot of people not focusing on their future years, many simply do not realise they may have a few small pots here and there.

Seeing all their small pots in one place should help folk get a better understanding of what state their retirement savings is in and the options they have.

Back to Ms McVey. She has been in the role since January when she replaced David Gauke who, in turn, had replaced Damien Green the previous June.

Mr Green had lasted less than a year in the role, but that was much longer than his predecessor Stephen Crabb who spent less than four months in the job.

In an age when cabinet ministers seem to resign or be pushed from their post every other week, that may not appear remarkable. But such impermanence in the post suggests there is a feeling at the top that it is less important than other issues.

That is a huge shame as the pension crisis is only likely to worsen in the coming years as more people begin to feel they have been misled about their options and opportunities.

And that means we could end up with more than just the 3 million or so Women Against State Pension Inequality campaigning for justice for their pension entitlement.

The pensions dashboard was first proposed after much campaigning by the pensions industry in 2016 when George Osborne was chancellor. Back then he said it would be up and running by 2019.

But Ms McVey’s current indecision makes that start date look very unlikely. In fact the whole notion of a dashboard to help people with their retirement looks to be in doubt.

According to reports, Ms McVey thinks the service could distract from the roll-out of universal credit, a major IT project that has been beset with problems. Is that more important or urgent?

It is, but with more than 420,000 civil servants at its disposal, the government should be able to deal with many different tasks, not just focus on one at a time.

The fact that the launch of the dashboard is in doubt was confirmed last week by Baroness Buscombe, parliamentary under-secretary for work and pensions.

She told the House of Lords: “The more we look at it, the more questions we are asking ourselves and the industry.”

That is not terribly positive after two years' work. On behalf of the industry the Association of British Insurers delivered a dashboard prototype back in March 2017.

There has been an overwhelming call for the government to stick to its commitment on the dashboard. It must heed the calls.

Last October the DWP took over the project with the pensions minister Guy Opperman promising: “I want to make it clear that this project will go ahead. The dashboard is a key part of our desire to ensure consumers are able to understand their pensions and plan properly for their future.”

It is pretty scandalous that his latest boss looks likely to renege on that promise. In fact Ms McVey has also reportedly suggested the state should not be providing the dashboard service.

It is fairly obvious that without state backing, the project will struggle.

After the news broke, John Lawson, head of financial research at Aviva, said: “As an industry, we could try and do this ourselves, but government backing is essential for three reasons.

“First, many schemes and providers will not supply data without being required to do so.

“Second, state pensions make up more than 40 per cent of the retirement income of the average Brit, so excluding state pension would reduce the dashboard’s usefulness.

“And finally, public sector pension data is needed to form a complete picture for people who have worked in both the public and private sectors.”

There has been an overwhelming call for the government to stick to its commitment on the dashboard. It must heed the calls.

Simon Read is a freelance journalist