The Department for Work and Pensions (DWP) has said the first of its promised pensions dashboards should go live next year with more to follow.
It made the announcement soon after the Commons Work and Pensions Select Committee warned that the dashboards should be treated as a priority and the Government should legislate for companies to provide the necessary information.
The dashboards are planned to allow people to access their information from most pension schemes in one place online. This will include how much they have in their pension pots, what they can expect to live on in retirement, and a function to help them find pensions of which they had lost track.
DWP said today the first should go live in 2019, with multiple dashboards to be introduced in the following years subject to the necessary consumer protection being in place.
Minister for Pensions and Financial Inclusion Guy Opperman said: “Pensions dashboards are another major milestone in our radical pension reforms, harnessing innovative technology to benefit savers. Plain pensions information at the touch of a screen will ensure better informed, more engaged savers and help many more people to plan effectively for retirement.
“Bringing pensions information into the digital age has the potential to revolutionise the way we all think about and plan for later life. People, young and old, should have all the help they need to get ready for retirement and maximise their pension incomes and, working with industry, we will ensure they do.”
Protection and safeguarding
DWP said it is now seeking views about what the new services will look like and how they will work, with consumer protection and safeguarding data being the top priorities.
The Government’s stance is that consumers will benefit from a range of dashboards to choose from, and it plans to work with the pensions industry to include State Pension information at some stage. The development and design of dashboards will be led by the industry.
A feasibility report has been published by DWP as the starting point for consultation. It highlights the complexity of the private pensions industry – with about 40,000 different schemes managed by 4,500 administrators plus organisation schemes managed in-house – and says the programme will work best with multiple dashboards to improve choice for consumers. These would be largely developed by the industry, although they would sit alongside one created by the Single Financial Guidance Body, which is to replace the three existing providers of government sponsored financial guidance.
The study lists questions for feedback on the expected benefits, data architecture and security, implementation issues and governance, and says the DWP will run a series of engagement round tables over this month.
The announcement follows concerns, which emerged during the summer, that DWP was moving towards dropping the plan for the dashboards to concentrate on its problems in implementing universal credit.
It has also come after the Commons committee expressed its concerns based on a round table discussion on the issue. It said the Government needs to legislate to ensure the companies provide the relevant data, that the dashboards would require a secure authentication service – citing GOV.UK Verify as a possibility – and sufficient security, and that there is a need for an independent governance body.
Frank Field MP, the committee chair, welcomed the DWP’s announcement.
“Pensions dashboards could have a transformative effect, by empowering consumers to plan for retirement and by reuniting them with ‘lost’ pension pots,” he said. “It’s hugely welcome that the Government is at last pressing ahead with this crucial project.
“For dashboards to work for consumers, the right protections must be in place from day one. The committee will be keeping a watching brief on the Government’s plans as they take shape.”
Not-for-profit financial technology specialist Origo has taken a central role in developing the central components and back end processes of the dashboard. Its managing director Anthony Rafferty responded positively to the committee’s report.
“We are pleased that today’s report provides direction on the key topics raised by industry – compulsion, digital identity, inclusion of the state pension and suitable governance. This will provide clarity to pension providers to allow active preparations to commence,” he said.
“We believe the pensions dashboard will be a foundation for innovation within the long term savings industry and will be one of the biggest catalysts to engagement the industry has ever experienced.”