Work and pensions secretary Amber Rudd has given the green light for the implementation of the long-awaited pensions dashboard designed to offer a way for people to see all their pension information in one place online, with the initial industry models expected this year
Development of a single digital source bringing together all the details about an individual’s separate pension pots has been under discussion for some time, and the government consulted on the principles last year.
In response to that consultation, the Department for Work and Pensions (DWP) has now announced that it will bring forward legislation ‘at the earliest opportunity’, which will compel all pension providers to make consumers’ data available to them through a dashboard.
There will be multiple industry-led dashboards displaying the same basic information, which the government wants to see developed and tested as soon as possible. A non-commercial dashboard will be delivered and overseen by the new Single Financial Guidance Body (SFGB), which was launched in January.
The SFGB will be responsible for setting up an industry delivery group made up of stakeholders from across the industry, consumer groups, regulators and government which will set out a timetable and roadmap to drive progress towards fully operational dashboards.
DWP says the delivery group will have three main areas of activity. The first is overseeing the digital architecture which allows dashboards to work. The delivery group will develop this and ensure that all parts of the architecture work effectively together.
Secondly, the group will ensure that dashboards are consumer facing dashboards, with interfaces, which present the information in a user friendly format. Finally, it will develop a governance system that monitors and safeguards participation in the whole ecosystem to ensure that consumers and their information are protected.
DWP says there is an expectation that the majority of schemes will be ready to ‘go live’ with their data within a three to four-year window.
However, while the government has confirmed that state pension information will be included ‘as soon as possible’ there is no timeframe for this, with the consultation outcome document stating ‘we will continue to work towards making this happen at the earliest possible opportunity.’
The document states: ‘This initial phase is intended to be a foundation, providing consumers with clear information, before considering the scope for future industry developments.
‘While we recognise that there is clear potential for dashboards to be part of a cross sectoral approach to wider financial planning in the future, our focus in the short-term must be on getting the pensions information brought into the twenty-first century in a way that works for consumers.
‘Work is ongoing across government on a broader vision for digital financial services, and our long term view is that dashboards should be the first step towards pensions becoming part of this joined-up strategy.’
Work and pensions secretary Amber 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.’
Yvonne Braun, director of long-term savings and protection policy at the Association of British Insurers (ABI), which has previously worked on a prototype dashboard, said: ‘The digital retirement revolution is here at last. All the pieces are being put in place to deliver the easy access to retirement information everybody needs and that the pensions industry is so keen to deliver.
‘The ABI, leading a cross-industry group of pension providers and schemes, has already put years of work into making dashboards happen and we can’t wait to see these vital services in action. We’re delighted to see the government committing to the necessary legislation and will continue to play our part in making dashboards a reality.’
Nigel Peaple, director of policy and research, Pensions and Lifetime Savings Association, said: ‘Preparing the sector for connection to pensions dashboards will be a major undertaking and one that we stand ready to support.
The government is right to acknowledge that connecting the majority of schemes may take three or four years.
‘But the government is also right to urge the pensions industry to act quickly, in 2019, to enhance the quality of their data, and to support the SFGB in developing appropriate data standards.’
Kay Ingram, director of public policy at national advisory group LEBC said: ‘We are pleased that pension schemes will be required to participate, which was one of our key recommendations. We also think it entirely sensible to phase this in to allow accurate data to be included in an orderly manner.’
However, the question of the inclusion of state pension information is likely to prove contentious, as campaigners including veteran MP Frank Field have argued this is essential if people are to understand their retirement options fully.
Helen Morrissey, pension specialist at Royal London, said: “After years of talk about the pension dashboard we need to ensure that what is delivered meets people’s expectations from the start.
‘If done properly the dashboard will give people a full understanding of what they have saved. If it is rushed, or we don’t have all interested parties on board from the beginning, there is a risk that we will not be able to deliver something meaningful or credible and the opportunity to engage people will be lost.
‘In addition, 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 data integrated from day one if the dashboard is to work. The opportunity presented by the dashboard is too important to be lost - we must get it right first time.’
Report by Pat Sweet