Industry responds angrily to suggestions Pensions Dashboard might be axed
17 July 2018
The financial services industry has responded angrily to the suggestion made by Secretary of State for Work and Pensions Esther McVey published in The Times, that the Pensions Dashboard might be scrapped, saying it made “little sense” would ultimately “make people’s retirement planning harder” and would make the industry “legitimately question” whether involvement in government projects in the future “was really worth it”.
It was reported that McVey believes Dashboard should not be provided by the state and had been lined up to be scrapped.
“If the Government does scrap the Pensions Dashboard it will be a huge blow to millions of savers. Many people already have defined contribution pensions from old jobs scattered across various different schemes, alongside bits of defined benefit entitlement and state pensions too,” said Tom Selby, senior analyst at AJ Bell.
“These pensions might be sat in poorly performing investments or subject to high charges that erode their value over time. It was hoped that allowing people to see all their pots in one place would encourage them to engage with their retirement pot, seek better value for money and clearly understand how much more they need to save for later life.
“Ultimately if the project is abandoned then the problem of pension pot proliferation – which will only get worse following the roll out of automatic enrolment – will still need to be dealt with one way or another. It might just be that a Government department burned by the painful introduction of Universal Credit has simply got cold feet over another major IT project.”
Michael Roe, development director of Origo, which has been heavily involved in Dashboard, helping develop the prototype and which recently announced the technology was ready to handle requests from 15 million and more users, said it hoped Pensions Dashboard would continue, “given the clear benefits to UK consumers”.
“We firmly believe that the Pensions Dashboard is important for consumers as it has the power to significantly improve peoples’ engagement with their pensions and their retirement planning. Keeping track of multiple pensions can be difficult for many people. Having the Dashboard to give them a single source of pensions data, including their state and their private pensions will lead to better decision making. In an ageing population that is important as it can take pressure off the State.”
Roe added: “The intention was always for the industry to fund and deliver the project, to provide the pension data and to establish a Governance Body. Government was required to provide State Pension data as it forms a large part of many people’s retirement income. Government was also to investigate a regime for compulsion.
Industry had the capability and the will to take the Pensions Dashboard forward, he added, “and the technology has been proven by Origo and its partners to scale for 15 million consumers. However, the best outcome for consumers was always a Government / Industry collaboration.”
Can the industry trust the Government?
In that respect, Selby added there is also a broader issue of trust between the Government and the pensions industry to be considered.
“It was the Government that told the industry it needed to develop a workable Pensions Dashboard model and deliver it by 2019. Huge amounts of time, effort and money have been dedicated by Association of British Insurers members to make that happen, with wide engagement from platforms, charities, advice firms and others.
“If the DWP is now going to pull the plug at the eleventh hour then the industry will legitimately question whether involvement in future such projects is really worth it.”
Kate Smith, head of Pensions at Aegon said: “Ditching the dashboard at this point makes little sense and will ultimately make people’s retirement planning harder.
“The pension industry stands ready to go ahead with the dashboard and constant delays and procrastination have been unhelpful in the extreme. There was never any intention for the government to fund this project, it was always going to be financed by the industry, the question was exactly how?
“We had always believed that there should be multiple dashboards, rather than a single dashboard provided by a government agency, such as the single public guidance body. This would overcome many of the Ministers’ concerns.
“With the government’s ban on cold calling delayed, this could prove to be yet another blow for the nation’s savers.”
The Department for Work and Pensions, which assumed responsibility for progressing Dashboard from Treasury, was later reported as saying work on the Dashboard was continuing.
However, delays by the DWP in publishing the results of its feasibility study can only add to uncertainty around Dashboard that today’s speculation has created.
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