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Pension dashboard plans finally unveiled

Pension dashboard plans finally unveiled

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The DWP’s long-awaited feasibility report into the dashboard, along with the consultation promised in the Budget, has finally been published, some nine months after the feasibility study was first expected.

Good news stories about pensions do not exactly come along that regularly. The relative success of automatic enrolment is perhaps an exception to the rule and it’s therefore difficult to understand the government’s apparent reluctance to push ahead with the pension dashboard initiative.

Opponents of the dashboard are few and far between. This is a project that appears to have broad support from government, the pensions industry and pension savers. Although Brexit has obviously been taking up much of the government’s time, it’s a mystery why the DWP has seemingly sat on this project for so long, when it’s likely to be received so positively.

The consultation paper promises that legislation will be passed to compel providers to join the dashboard party. Quite rightly, this should not be a pick and choose event. Pension savers will only see a real benefit from using the dashboard, if they can be sure all of their pensions are covered. The low-hanging fruit – money purchase pension and master trusts – are expected to be involved from next year. The majority of other pension schemes are expected to come on board within the next 3 to 4 years. State pensions will also be included, although there is no confirmed date for this. In the meantime, the Check Your State Pension Service can be used.

One reason for the delay appears to be the DWP’s consideration of another fundamental question: whether to have a single, or multiple versions, of the dashboard. In a sense the government has opted for both. The new Single Financial Guidance Body (SFGB) will host a non-commercial dashboard, while the industry will be free to design, develop and own dashboards. (For those of us that pore over every line of government material, this was expected, with the Treasury’s Budget document referring to “pension dashboards” (plural).)

The reason for these multiple dashboards is clear: the opportunity to drive innovation. There’s nothing wrong with innovation – in the modern age, it’s replaced money in making the world go round – but it must be innovation for the right reasons.

The government has been clear all along that the dashboard project should be developed and funded by the industry, rather than centrally. For this reason, it is really no surprise that the multiple dashboard option has been chosen. If the industry is footing the bill, then it will expect to get something out of it.

The DWP does acknowledge that consumer research about the dashboard has confirmed a preference for a single pension dashboard. Most of the other countries with dashboards use a single non-commercial offering endorsed (if not run or owned) by government. The DWP claims it has come across “some evidence” that multiple dashboards can encourage usage.

Regardless of whoever pays for the dashboard, the interests of pension savers are key. The dashboard will only remain a good news story if it meets the needs of those it is there to benefit most: pension scheme members.