Industry concerns over Dashboards timeframes
4 April 2019
Commentators flag details around legislation, inclusion of state pension and ‘significant amount of work’ yet to be done before dashboards become reality
Work and pensions secretary Amber Rudd has given Pensions Dashboards the green light following an industry consultation, but ongoing Brexit uncertainty means proposals could be delayed beyond the year.
In a statement, Rudd said: “Dashboards have the potential to transform the way we all think about and plan for retirement, providing clear and simple information regarding pension savings in one place online.”
Crucially, the Department for Work and Pensions has unveiled plans to force providers to transfer their data to be used in the Dashboard, stating that it expects the majority of schemes to provide information to Dashboards within three to four years. However, for the government to compel schemes to take part, it requires a law to be passed via a pensions bill.
While industry experts welcomed the update, there was concern that the furore over Brexit will slow down the agenda.
Tom Selby, senior analyst at AJ Bell (pictured), said Pensions Dashboards had “clearly been shunted down the priority list.”
He commented: “In the current political climate there is no guarantee the Pensions Bill needed to compel schemes to provide data to Pensions Dashboards will see the light of day in 2019. However, the fact the policy has attracted cross-party support suggests it is likely to become reality eventually.”
Selby said the development represents a “potentially significant positive step forward” both in uniting people with lost pensions and boosting engagement with retirement savings over the longer term.
He added: “The DWP’s pragmatic approach towards early testing is sensible, although care will need to be taken to ensure users are fully aware of the limitations of Dashboards. Ultimately, this will be a starting point for most people in engaging with their retirement pots, rather than an all-singing, all-dancing solution.”
Jon Greer, head of retirement policy at Quilter, said that while an update is welcome, the prospect of a Dashboard magically appearing in the coming weeks or months is a “fairy tale”.
He explained: “The governing body and providers have a significant amount of work to do and it needs to be done carefully. Any Dashboard must have robust independent governance and regulation. Public support of the dashboard will in part be determined by the extent to which they believe it is safe and secure, because Dashboards will have reams of pension wealth information all in one place.”
In the DWP’s consultation response, it said information about people’s state pensions would be included “as soon as possible”, but stopped short of giving a more detailed timeframe.
Kate Smith, head of pensions at Aegon, said: “While it’s great to get confirmation that the state pension will be included on the Pensions Dashboards, it’s concerning that there is no timescale or deadline being set for this being delivered. There’s a lot of work that will be required by providers to ensure scheme information is accurate, secure and available within the suggested 3 to 4 year window.
“For many people the state pension forms the core of their retirement plans and is required for the pensions dashboards to provide the fullest and most accurate account of someone’s pension savings.”
Helen Morrissey, pension specialist at Royal London, reiterated the importance of the state pension in the Pensions Dashboards.
She said: “The government’s plan to provide a link to state pension is simply not good enough – pressure needs to be put on HMRC to get the state pension dashboard data integrated from day one if the Dashboard is to work. The opportunity presented by the Dashboards is too important to be lost – we must get it right the first time.”
Alistair McQueen, head of savings and retirement at Aviva, added: “With the government now fully committed, and with a sensible route map to success, all must now move forward with confidence, purpose and ambition.”
However, Origo MD Anthony Rafferty said the DWP paper was “the expected and positive step forward to establishing Dashboards”, citing four key elements to making the initial Pensions Dashboards a reality; governance, compulsion to provide data, state pension and digital architecture. “Next steps for all of these elements have been addressed in the paper, which is good news,” he said.
He stressed that the technology was in place. “We have built and scale-tested the central components and believe that the digital architecture can be deployed quickly to meet the stated timescales. The task now is for the industry to take that architecture forward to launch. It is a very exciting challenge!”
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