The government has given the green light for pensions dashboards, so savers will be able to view all their pension pots in one place for the first time.
The more employers we have, the more pension pots can be accrued and the more likely it is we will lose track of them as we move from job to job.
Pensions dashboards will help reunite people with up to an estimated £20bn in lost pension money, says @Yvonne Braun, director of long-term savings policy at the Association of British Insurers (ABI), citing an analysis from the Pensions Policy Institute.
The more information we can access at the click of a mouse or the swipe of a smartphone app, the more decision-making power we have.
It is true that the income our pensions eventually produce depends on a myriad of variables, including charges, interest rates, opting for annuities or income drawdown, whether our funds are actively managed, the state of the economy and the political environment.
We need certainty when saving for retirement. The pensions dashboards will help to give us this. They will give us an estimate of what our pensions might be worth in the future and what we have saved to date.
“People will, for the first time, get the facts and figures about their pension in one place. It will transform the way we all think about and plan for retirement,” work and pensions secretary @amber Rudd tweeted on April 4, the day the government gave the pensions dashboards the go-ahead.
The Department for Work and Pensions (DWP) believes dashboards, accessible from computers, mobile phones and tablets, will:
“Plain 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,” says @GuyOpperman, minister for pensions and financial inclusion.
“Bringing pensions information into the digital age has the potential to revolutionise the way we all think about and plan for later life. People, young and old, should have all the help they need to get ready for retirement and maximise their pension incomes…”.
The Single Financial Guidance Body (SFGB), which has replaced government-sponsored bodies Money Advice Service, the Pensions Advisory Service and Pension Wise, will deliver and oversee a non-commercial dashboard. It has developed a prototype project.
As the ABI points out, people will have a choice of whose pensions dashboard to use, which @Yvonne Braun says “will give consumers choice and drive innovation”.
The ABI says restricting the service to one non-commercial dashboard would prevent it achieving its potential. It says the DWP is increasing the number of people who will engage with their pensions by boosting the number of places that consumers can safely access their data – such as phone apps and from different websites.
Savers are more likely to use dashboards that can be incorporated into other services, such as online banking. Private firms will be able to offer other bells and whistles to encourage people to use their dashboards.
John Govett, SFGB chief executive, says pensions are often the biggest financial investment people will make. “The new pensions dashboards will play a crucial role…helping people make decisions about their money and pensions with confidence, so they can enjoy greater financial wellbeing throughout their lifetimes.”
How straightforward they will be to use is an open-ended question, but this should become clearer. The government has asked for pension schemes to prepare their data to be ready within a three to four-year timeframe.
It should be as simple as inputting a few personal details to access all our pensions information, but it depends on how good the technology is behind the dashboards.
Before the pension search can take place, the dashboard that individuals try to use will determine they are who they say they are. Both the government and commercial enterprises that make pensions dashboards available will need to reassure the public that data is secure.
The government’s response to its consultation on pensions dashboards includes many references to security so it is something that is front of mind.
It points out that the proposed ecosystem for all dashboards, whether hosted by commercial or non-commercial organisations will be governed by the same rules.
The consultation paper says dashboards simply allow users to access a view of the data held by pensions schemes or ‘Integrated Service Providers’ – which securely hold pension information on behalf of pension schemes – so the dashboards do not store the actual information.
The next step is for the government to table legislation to compel pension providers to make their data available to the public via dashboards.
Pensions dashboards are a much-needed tool to put people in touch with pension pots they have accrued, and they will help plan for what will hopefully be a long and healthy retirement.