On 3 December 2018 the DWP published “Pensions dashboards: feasibility report and consultation”. This followed on from a round table discussion held on 27 November 2018 and a letter from Chair of the Work and Pension Select Committee Rt Hon Frank Field MP to the Pensions Minister urging him to commit now to legislation compelling firms to provide customer data for the Pensions Dashboard.
The pensions dashboard plans to be a service which provides a single point online where people can access all their pensions information. In order to ensure that all pension information is available the Government has stated that it is prepared to legislate to compel schemes to provide their data. They have also committed to take steps to provide State Pension information via dashboards.
The proposals don’t restrict the number of dashboards, but a central non-commercial dashboard is proposed to be hosted by the Single Financial Guidance Body (SFGB) to offer an impartial service, in particular to those that may not be targeted by the commercial offerings. This is seen as the starting point for Pensions Dashboards with other commercial offerings to follow.
The Government is planning to help convene a delivery group consisting of experts from both the industry and Government. This group is proposed to be led and steered by the SFGB, with Government working with the regulators to ensure consumers are protected.
In addition to the dashboard the Government is proposing a single Pension Finder Service (PFS) and will compel schemes to provide their data to this service. The industry delivery group will also be responsible for the delivery of this service.
The report states that as a minimum, pensions dashboards can help to:
- increase individual awareness and understanding of their pension information and estimated retirement income;
- build a greater sense of individual control and ownership of pensions;
- increase engagement, with more people taking advantage of the available advice and impartial guidance;
- support the advice and guidance process by providing people with access to their pensions information at a time of their choosing;
- reconnect individuals with lost pension pots, benefitting the individual and industry; and
- enable more informed user choices in the decumulation phase (the point when a decision is made by a saver on how to access their savings) by making it easier to access the information on which to base these decisions.
As announced in the Autumn Budget the Government committed to funding for 2019/20 to help fulfil its facilitation role. However, the Government states that the cost of the governance structure should be met by the pensions industry and the industry should also fund:
- the development and delivery costs of the dashboard infrastructure, such as the PFS and identity verification;
- the development of a non-commercial, consumer-focused dashboard hosted by the SFGB; and
- any new regulatory functions related to dashboards.
The dashboard, if produced well, should bring increased clarity to consumers. Many consumers lose track of historic pensions and don’t understand what they might now be worth. However, this will be a lot of work for the pensions industry, especially for those who are less technologically advanced. In addition, those with closed books of business may not feel quite as compelled to get involved and so legislation may be needed.
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This document was prepared as a general guide only and does not constitute tax or legal advice.