The estimated cost of the Pensions Dashboard Project has increased by almost a quarter (23 per cent) over three years, a report from the National Audit Office has found.
The report, Investigation into the Pensions Dashboard Programme, revealed the cost of dashboards has jumped from £235mn in 2020 to £289mn in 2023.
The NAO explained a range of factors contributed to this increase including increase in supplier costs, changes to the Money and Pensions Service’s underlying costing assumptions, and the period covered being extended by two years to 2031-32.
Maps spent £59mn between April 2019 and March 2024.
Within this, spending for 2022-23 was characterised as capital spending, meaning it was used to develop new infrastructure rather than used for running costs.
However, the report pointed out Maps is not intending to do the same for the majority of spending in 2023-24.
This indicates, according to the NAO, that most of the spending did not result in further development of the digital architecture but was instead used to maintain the platform and services during the reset process.
Additionally, the report found that the estimated gross benefits of the programme have fallen from £437mn in 2022 to £413mn in 2023.
These findings were contextualised by Scottish Widows head of policy, Pete Glancy, who said that whilst costs of almost £300mn is a large number, it’s only 0.01 per cent of the value of pension assets in the UK which exceed £3trn.
Glancy added: “Pension dashboards will help everyone know what they have in their pension pots, the income they can expect to have in retirement, and also enable them to start to compare how each of their pension pots is performing relative to their others.
“In the longer term, we believe that pension dashboards will become a ‘national treasure’.
“However, this is a complex project, and whilst any delays or cost over-runs are always unwelcome, it’s important that the government together with the pensions industry gets this right."
Delays
The report also provided insight into the reasons for delays to the dashboard project, finding that capacity and capability issues, including a lack of digital skills and ineffective governance, played a role here.
The NAO found the DWP “did not have assurance” that Maps had the capacity and capability to deliver dashboards, but the government department told the NAO it had expected that Maps would be able to build the capacity it needed.
These delays have led to a programme reset and a revised final connection deadline of October 31 2026, a year later than was outlined in the initial timetable.
The DWP has yet to specify when pensions dashboards will become available to the estimated 16.3mn users who could stand to benefit but this is likely to be later than previously expected due to the delay.
Chair of the Committee of Public Accounts, Meg Hillier MP, said: “I am disappointed that the PDP has been delayed by a lack of skilled resources and ineffective governance - problems we see again and again across government.
“The DWP must learn lessons from what happened on this programme and strengthen how it works with its arm’s length bodies including the Money and Pensions Service.”
In response, a spokesperson for the DWP said: “As the NAO recognises, the Pensions Dashboards Programme has made significant progress towards delivering a service which will transform how savers plan for their retirement.
“Action taken by the DWP to reset the programme to get it on track for successful delivery means connection testing will begin from August 2024 before a wider onboarding of pension schemes and providers from April 2025.”
The spokesperson also pointed out that, although the report identifies some historic challenges with the programme, it recognises the action taken by the DWP to reset the programme to get it on track for successful delivery.
tom.dunstan@ft.com
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