The pensions dashboard project has hit several bumps in the road since it formed part of the Financial Advice Market Review recommendations in 2016 – and the latest developments could prove the biggest yet.
With the slated deadline for its launch now less than six months away, not only are the dashboard’s finer details still yet to be revealed, but fears surfaced during the summer that it could end up being scrapped entirely.
Those concerns have been alleviated somewhat, but the government itself now looks unlikely to be taking a truly active role in the scheme. In the meantime, its March 2018 feasibility study is still yet to be published at the time of writing.
The dashboard – a project initially assigned to the Treasury and managed by the Association of British Insurers – is intended to enable consumers to see all of their pension arrangements on a single digital interface. It has been heralded as a key component in encouraging consumers to play a more active role in managing their finances.
Although the project is running behind schedule, little suggested it was in jeopardy until this summer. On July 17, The Times reported that Esther McVey, secretary of state for work and pensions, was planning to jettison the dashboard, citing the distraction it would cause to the implementation of universal credit. This sparked outcry from a number of providers, leading industry figures, and consumers. In response, a petition was set up on the 38degrees website to save the initiative, gathering more than 125,000 signatures by early August.
Ms McVey and pensions minister Guy Opperman both allayed fears in early September and reaffirmed the government’s support for the project. But the ministers’ failure to respond immediately after the rumours surfaced has drawn criticism.
“I was exceedingly disappointed,” says Fiona Tait, technical director at Intelligent Pensions. “In 2016, consumers’ expectations were created by then chancellor George Osborne, who told them that the government ‘will ensure the industry designs, funds and launches a pensions dashboard by 2019’.
“Since then, a number of organisations from across the industry have contributed to the dashboard project, and they also have a right to expect this work will lead to a tangible and worthwhile result.”
Industry, over to you
Despite restoring its backing, the government looks set to take a back seat rather than a lead role. In September, it announced plans to facilitate an industry-led dashboard, which “will harness the best of industry innovation”.
It added: “We will continue to engage with the industry on this model and the government will protect pension savers and personal information by legislating where necessary.”
A collaboration between the government and the industry to produce the best possible working dashboard appears, on the surface at least, to be sensible. But concerns have been raised about whether an industry-led initiative can obtain all of the necessary data. Some have accused the government of dodging the difficult decisions.
“A working dashboard could certainly be delivered by the industry, but it would not be as comprehensive or as trusted as one delivered under government sponsorship,” says Ms Tait.
“Much of the information required is already available for modern pensions, but the crucial missing ingredients are universal participation across all UK pension arrangements and a way of collating all of the data in one place.”
But the government’s position on this point is still unclear, as Mr Opperman has so far remained non-committal on making companies provide a strict and consistent set of data.
As things stand, the government’s words on the project appear far louder than its actions. With the original May 2019 deadline approaching, clarity on many fundamental aspects of the dashboard are still yet to be made public or, more worryingly perhaps, even agreed.
As James Herman, partner and financial adviser at Finura Partners, notes, the project’s complexity has meant changes to its original format and timescale are almost inevitable. And as Mr Opperman announced in February, those involved in the project have stumbled across a number of major sticking points.
The specifics of these points were not revealed by the minister. The feasibility study commenced in October 2017 – conducted by the Department for Work and Pensions, which took over responsibility for the dashboard from the Treasury that month – with details originally penned to be published in March 2018. Fast-forward eight months and the industry is still awaiting these outcomes.
Guidelines
Michael Roe, development director at Origo – one of the project’s developing partners and a firm that has already successfully trialled a dashboard prototype – outlines a number of hopes and expectations. Chief among these, he says, is a regime of compulsion.
Also on Mr Roe’s wish list are guidelines on how to provide consumers with a trusted digital ID scheme, the designation of a governance body for oversight, and the need to include or link to state pensions data, which can currently be accessed on the government’s ‘find my state pension’ facility on its website. But policymakers’ ongoing refusal to pledge that this vital piece of data will feed into the dashboard is another point causing unrest.
“An incomplete pensions dashboard is not going to be of use to anyone. It is important the government commits to ensuring the state pension is included,” says Laura Suter, personal finance analyst at AJ Bell.
Advisers, understandably, hope that the outcomes of the study are geared towards helping consumers, particularly when it comes to the subject of cost.
Mr Herman says: “We would hope that the creation of a dashboard would lead to lower costs for clients considering a pension switch. A huge amount of time and cost is involved in ensuring our advisers and clients have the relevant information.
“Pension companies are often not forthcoming with information, or provide incomplete data not sufficient to assess suitability. A perfect situation would be for the dashboard to significantly reduce this burden, which results in lower costs for the end client.”
Another debatable issue that many hope the feasibility study will clarify centres on the number of dashboards that will ultimately be produced. Some favour the simplicity of a single service, whereas others feel that several options would be more beneficial to consumers.
“The industry generally supports multiple dashboards because it will get the message out there to consumers, rather than a single one that would have to be heavily marketed,” says Mr Roe.
Adviser access
Whatever the outcomes from the study, the need for consumers’ pension data to be current and accurate are matters that attract little debate. The subject of what constitutes too much or too little data, however, is contentious.
“The dashboard shouldn’t be trying to answer everything on one screen,” says Mr Roe.
“It should be kept fairly simple: the basic details of the pension and what it’s worth – for defined contribution you get a reasonably up-to-date valuation, for defined benefit it doesn’t need to be that up to date – and you have a means of projecting that into an accumulated retirement income.”
Security of data is also crucial, as the dashboard is bound to attract the attention of scammers. As Mr Herman notes: “If the client has to provide permission to gather their sensitive data on their behalf, this could potentially be abused.”
Advisers, though, can provide an obstacle for fraudsters. Those who are regularly reviewing their finances with a professional are far less likely to make rash decisions.
In October 2017, the ABI said advisers would not be granted access to the dashboard, drawing criticism from intermediaries. But according to Mr Roe, this stipulation can be circumvented with the client’s permission, allowing advice or guidance to be sought.
“We’ve developed the ability for a consumer to share their dashboard with an adviser; delegated access as it’s called. When they see their pensions on one screen they can then seek advice, [or] they could equally share that screen with the Single Financial Guidance Body.”
With plenty of ideas such as these still up for inclusion, the need for clarity from the government is becoming ever more urgent.
