The Government must ensure all potential scam risks are considered ahead of the launch of Pensions Dashboards in 2023, says AJ Bell.
With the Department of Work and Pensions’ consultation on Pensions Dashboards in the UK having closed on 13 March, AJ Bell said the Government and the Money and Pensions Service need to be vigilant and “continually strive” to close down scams.
Tom Selby, head of retirement policy at AJ Bell, said: “People now expect to be able to access their finances at the touch of a button via their mobile phone. As such, the Government is playing catch up with people’s expectations in introducing legislation to facilitate Pensions Dashboards. However, late is most certainly better than never and Dashboards undoubtedly have the potential to help millions of people not just locate their retirement pots but engage with them as well.
“Introducing more digital ways to access information will, unfortunately, always lead to an increased risk of scams. However, as scammers will continue to innovate to defraud people, Government and the Money and Pensions Service need to be vigilant and consistently and continually strive to close down scams.
“Identity services will be key to ensuring savers using Dashboards are protected and should take on responsibility for checking the right people receive the right information about their retirement pots.”
Selby said thorough validation of a person’s identity will be critical to making sure it is the customer who is trying to gain information and warned that if Dashboards lead to people’s pensions becoming compromised, the loss of trust in the service could prove “fatal.”
The development of Dashboards is widely acknowledged as an important step in helping people locate their pension pots, particularly with the combination of an increasingly transient workforce and automatic enrolment inevitably leading to more pension pots scattered far and wide. Research suggests the number of deferred pensions could reach 27 million by 2035.
Selby added: “First and foremost, people need help locating these lost pensions. They need to be confident the information they see is accurate and crucially any potential gaps need to be clearly explained.
“As Dashboards develop from these early versions, a competitive market will hopefully flourish with different tools made available so savers are better equipped to turn information about their pensions into affirmative action.”
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