The pensions dashboard presents a great opportunity for the government, regulators and the pensions industry to open people’s eyes to the value of saving for retirement.
An ambitious undertaking that could help to transform the way people prepare for retirement – the notion of a pensions dashboard for UK savers dates back more than 20 years. The upsides are a smoother and simpler savings experience, but the journey has been tumultuous and complex.
Bringing together a complex range of financial data from a number of different providers was always going to be a challenge, but with equivalent service models up-and-running in countries across Scandinavia, as well as the likes of Australia, Belgium and Israel, the UK is right to drive through delivery of the dashboard.
For the first time, savers would have access to all of their retirement savings information – including personal, state and workplace pensions information – in one place. This one-stop digital portal for individuals to access and view their pensions and savings information could “revolutionise” the way people prepare for later life.
According to pensions minister Guy Opperman: “Having pensions information at the touch of a screen will ensure better-informed, more engaged savers and help many more people to plan effectively for retirement.
“Bringing pensions information into the digital age has the potential to revolutionise the way we all think about and plan for later life.”
Visibility over all of their entitlements, in one place, and insight into whether they are projected to be saving enough for retirement is something people really value. Aside from the overview and control of retirement finances that it provides, the dashboard will also allow people to keep track of savings from pension pots that would otherwise disappear into the ether.
According to research from the Pensions Policy Institute on behalf of the Association of British Insurers, as many as 1.6m pension pots are “lost” and at risk of remaining unclaimed – adding up to an estimated £20bn in lost savings.
The concept undoubtedly sounds great. Those responsible for implementation have, however, identified a myriad of challenges and questions around governance, compulsion, regulation, funding and launch timing. It is important that these are addressed and overcome.
Government commitment to the project has also been questioned, despite Prime Minister Theresa May and Mr Opperman pledging their support. However, with the Department for Work and Pensions handing delivery responsibility over to industry, and a 2019 launch date still fixed, crunch time is upon us.
Launch hopes and expectations
Whatever shape the initial dashboard takes at launch, we should expect a tool that prioritises simplicity and presents key data in a straightforward intuitive fashion.
Merely giving people digital access to this information should breed positive results in terms of the average person’s awareness of, and engagement with, their retirement savings. Even if the dashboard acts only as a prompt or reminder for more people to keep retirement savings in mind, it will have ushered in a new dawn in pensions planning.