The Government is to launch a ‘pensions dashboard’, which should allow consumers to quickly access details of the arrangements they have made to provide for their retirement.
When it is launched, everyone in the UK with some form of pension savings will be able to access the dashboard and view information such as:
· What pension schemes they have contributed to – including final salary occupational schemes, defined contribution occupational schemes, personal pension plans and workplace pensions
· How much they have saved to each of these arrangements
· What level of income they might receive from each of these schemes
· What level of income they might expect from the state pension
So how will the dashboard work? Once the person has confirmed their identity, the system will send a query to all the pension schemes and pension providers and will produce a list of schemes which match the individual’s personal details.
In justifying the need for the dashboard, the Government notes that as much as £400 million could be sitting in pension arrangements where the planholder is unaware of the existence of the scheme.
Keeping track of all of your pension plans is increasingly difficult given that people now move jobs so readily. The Government also notes that the average person has 11 different jobs during their working life. All employers are now obliged to provide a contributory workplace pension scheme, so in the future it should be the case that, every time someone moves to a new job, they get a brand new pension scheme to go with it.
Consumers then need to make sure that they keep track of all of these schemes, which is no easy task. Suppose someone retires at age 70 – far from implausible given the trend towards working longer – and is then faced with tracking down a workplace pension scheme of which they ceased to be a member when they were aged 25! It is therefore hardly surprising that, at present, people often miss out on retirement income to which they are entitled simply because they were unaware of the existence of a particular pension arrangement.
The official Pensions Dashboard website makes the bold claim:
“If you have missing pensions then you’ll find them by using Pensions Dashboards.”
The Government says it is hoping to fully implement the pensions dashboard in 2019, although this is not a firm commitment, and there is certainly no definitive date for implementation either at present. April 1 2019 has been suggested as the implementation date, although it is reportedly far from certain that this target date will be met.
The advantages of the dashboard are easy to see: individuals will be able to access details of all their pension arrangements at the touch of a button. It will save time that might otherwise be spent trying to track down all of these schemes and contacting the providers to obtain information.
However, concerns have been raised over whether the dashboard will provide adequate protection of individuals’ data. It is also doubtful as to whether all pension providers will be able to provide data in a format that is compatible with the dashboard.
Some industry commentators also feel that with such a major project, some initial teething troubles are inevitable. This could mean that public trust in the dashboard is affected if any major IT problems are experienced, or if the implementation date ends up being delayed.
Australia, Sweden and the Netherlands are amongst the countries which have already successfully launched similar dashboard schemes, and there is now a concern within government and within in the financial services industry that the UK is ‘lagging behind’ other countries.
So hopefully a functioning dashboard system will be up and running in the UK before the end of next year?