A government announcement on its digital identity project has been hailed as a "significant step" for the pension dashboard.
Oliver Dowden, minister for implementation, told Parliament the private sector would take responsibility for broadening the usage and application of the Gov.UK Verify programme.
Introduced in 2016, this identity assurance system was intended to provide a single trusted login across all UK government digital services, verifying the user's identity in 15 minutes.
Rob Yuille, head of retirement policy at the Association of British Insurers (ABI), praised this development and said a digital ID all parties can trust would be a critical component of pensions dashboards.
He said: "Many people we’ve met in the digital ID field have long seen the government's ideal role in this market as agreeing standards, rather than providing a service, and this confirms a move in that direction."
The pension dashboard is due to launch in 2019 and would allow savers to see all of their retirement pots in one place at the same time, giving them a greater awareness of their assets and how to plan for their retirement.
Last month, the government said it would let the industry take lead on the project and shied back from committing to force providers to submit client data.
Mr Yuille added: "Consumers will use dashboards to access data about both state and private pensions - so having private sector solutions that meet government standards removes a significant risk to the project.
"Important questions remain about how these standards are set and governed – just as in any cross-industry tech project."
In his statement, Mr Dowden revealed contracts have been signed with a number of private sector identity providers, for an 18-month period, and with capped expenditure.
He said: "The Government expects that commercial organisations will create and reuse digital identities, and accelerate the creation of an interoperable digital identity market.
"This is therefore the last investment that the government will provide to directly support the Gov.UK Verify programme. It will be the responsibility of the private sector to invest to ensure the delivery of this product beyond the above period."
Mr Dowden said poorly secured services were vulnerable to attack from cyber crime and other hostile activity.
He noted that the government’s digital identity programme "enables citizens to securely prove that they are who they say they are to a high degree of confidence" when transacting with government online.
"It is a major enabler and a critical dependency for government’s digital transformation," he concluded.