Pension experts are warning the government's proposed single pension finder service for the pension dashboards will unnecessarily drive up costs for providers and the end consumer.
The Department for Work & Pensions (DWP) had published a consultation on the project on Monday (December 3), accompanied by the long-awaited feasibility study, which proposed multiple dashboards but a single system to search for data from different pension schemes.
The plan for the pension dashboards, with the first one due to be launched in 2019, was to allow savers to see all of their retirement pots in one place at the same time, giving them greater awareness of their assets and how to plan for their retirement.
The government said the pension finder service, which will collate the data, should be run "on a non-profit basis and with strong governance" and it left it to the dashboard industry delivery group to decide how to best deliver it.
Romi Savova, chief executive of PensionBee, told FTAdviser having only one finder service meant there was a lack of competition on pricing.
She said: "The cost of funding it is going to be unnecessarily high, and certainly higher than if we had some competition in that space.
"With multiple pension finder services, each provider could choose which one it wanted to use, or even providing itself, if that was more cost effective."
Ms Savova pointed to open banking, where data standards are mandated by an independent governance body but there is an ecosystem of providers placed around the banks.
"In open banking all of these are commercially independent and therefore there is some competition to set the price," she said.
Ms Savova noted she had made DWP aware of her concerns.
One of the questions included in the consultation, which will close on January 28, was if respondents agreed there should be only one pension finder service, and what alternative could be proposed.
Henry Tapper, director of First Actuarial and founder of the Pension Playpen, shared Ms Savova’s views.
He told FTAdviser: "Giving a monopoly to find pensions to any organisation will end in tears.
"Open pensions are technology driven and provide consumer value for money – they are being sidelined in favour of old fashioned techniques. The result will be a manual solution that will be slow, expensive and unused.
"We need open pensions – just as we needed open banking. Open banking arrived in a year – there is no reason that open pensions should take any longer."