Pensions dashboards rules have been published by the DWP with proposed deadlines for pension schemes to supply data, suggesting that public access could take several years according to LCP partner Steve Webb.
The new legal deadlines proposed are that large pension schemes must provide dashboards with data between April 2023 and September 2024; medium-sized schemes must provide dashboards with data between October 2024 and October 2025, and small and micro pension schemes are expected to start in 2026.
Webb says: “Bringing together full pension data in one place is a mammoth task and Ministers have repeatedly over-promised and under-delivered on this goal. Back in 2016, there was a promise of a dashboard in use by 2019, but now it looks as though the first generally accessible dashboard will not be available until mid-2024 – at least five years late. The biggest headaches include bringing on the public service schemes, which have major headaches of their own to deal with, and Defined Benefit pension schemes where complex new calculations may be required. It is vital that the government ensures there is no further slippage in this project and that the benefits of dashboards are available to the public as soon as possible”.
AJ Bell head of retirement policy Tom Selby says: “The rubber is about to hit the road as Pensions Dashboards move from theory towards reality. Dashboards have the potential to revolutionise retirement savings in the UK, making it easier for people to track their pension pots online. This is increasingly important as the combination of an increasingly transient workforce and automatic enrolment means more people are likely to build up multiple pension pots throughout their lives.
“In fact, the number of potentially lost or left behind pensions in the defined contribution master trust market is expected to increase to a whopping 27 million by 2035. Some estimates suggest people can change jobs up to 11 times during their working lives – potentially building up a new pension each time.
“Having pensions scattered all over the place is not ideal for a number of reasons. Multiple pensions can be hard to track and it makes planning your retirement more complicated. Savers who combine their pensions can also benefit from more choice and lower charges, and Dashboards have the potential to make doing this a lot easier.”
“Over the longer term, Dashboards could become a valuable communication and engagement tool. However, the size of the practical challenge of getting people’s pensions online in a safe and clear way should not be underestimated.
“Anyone expecting Dashboards to be launched immediately with bells and whistles attached might be disappointed by the relatively slow staging timetable outlined today. Some savers may need to wait over 4 years to see all their pensions online via Dashboards, although for those with pensions in larger schemes it should be much faster.
“The Government has understandably focused on getting the biggest schemes to comply first as this is where the majority of pensions are held. Once a ‘critical mass’ of schemes has been reached and prototypes have been fully tested, Dashboards will then be made available to the public. Communication of the information that is and isn’t included via Dashboards will be absolutely critical in ensuring they gain legitimacy and allow people to make better-informed retirement decisions.”
Aegon head of pensions Kate Smith says: “The regulations set out what schemes need to do to connect to the pension dashboard digital architecture, ongoing requirements and the rules for providers which choose to build their own pension dashboards. However, this is just the start, more consultations will follow from the FCA setting out what pension providers have to do, including those who wish to offer their own pension dashboard, and the FRC’s consultation on more consistent Simplified Money Purchase Illustrations projections as well as technical standards set by the Pension Dashboard Programme.
“Large master trusts and FCA regulated pension providers, along with the State Pension, will start connecting to the pension dashboard digital architecture from April 2023. They will be quickly followed by defined benefit and defined contribution trust-based pension schemes, including public sector pensions, staged by membership size. The State pension is expected to be included from day one. The idea is to achieve coverage as quickly as possible by staging the largest pension schemes, by active and deferred membership first. By April 2025, within two years of the first staging date, it’s expected that 99 per cent of memberships, both active and deferred, will be connected to the digital architecture and sharing members’ data. This will be a massive effort for all involved. Now that we have the draft regulations and the missing details, pension providers and schemes can work in earnest to get ready for their staging date.
“Although a highly exciting moment, it’s still over 800 days to go before consumers will be able to access pension dashboards and view their pension data in one place online. Pensions dashboards aren’t expected to become ‘live’ to consumers until around April 2024. Although this is perfectly justifiable to deliver ‘critical mass’ of memberships, the so-called ‘Dashboard Available Point, isn’t likely to be achieved until then, it adds on another year of waiting and anticipation beyond the previously anticipated April start point.”
Hymans Robertson client manager for third-party administration Karl Lidgley says: “It is good to see the publication of this consultation which covers many of the key aspects that will contribute to the successful introduction of the pensions dashboard. This should help to give much-needed clarity on what needs to be done over the coming months and years. The pensions dashboard will be the most transformational event to support UK savers for retirement in our lifetime. As well as reuniting people with their lost pensions, it will enable far more effective, personalised guidance to give savers the support they need for the best possible retirement. We know times are hard for people and as an industry, we must do everything we can to maximise every possible penny people will have for retirement. A comprehensive working pension dashboard is fundamental to this goal.”
Interactive Investor head of pensions and savings Becky O’Connor says: “Millions of pension savers stand to benefit from being able to see all their pensions in one place, so pensions dashboards are a really important initiative, with the potential to drive greater engagement and ultimately, bigger pension pots in retirement.
“Research shows that as the jobs market has become more mobile, even some younger workers in their twenties are saying they already have four or more pension pots behind them – you can easily see how some of these valuable pots of money could get lost in a lifetime of career and address moves.
“Note the pluralisation in these proposals – there will not just be one dashboard – but a number of dashboards from different providers. If the information is presented consistently, the number of dashboard providers shouldn’t be a problem for people accessing their pensions record.
“But it’s important to avoid a situation where the same data can end up being presented differently, for example, variances in credit scores from different credit agencies, as this could lead to confusion. If all dashboard providers are using the same sources and following the same guidelines, this can hopefully be avoided.
“It’s interesting to see more of the thinking about whether dashboards could or should lead to greater consolidation. There’s clearly a case for this if people can save money or find a home for their pensions that better suits their retirement plan and the Government acknowledges this, although it will not want dashboards to turn into a competition among providers from the get-go.”
Scottish Widows head of policy Pete Glancy says: “We believe that the pension dashboards could be a game changer, which over time will become highly valued by the public. People will be able to see all of their pensions in one place for the first time, including their State Pension entitlement. They will also be able to view those details intuitively on their smart phones, checking in on how their pension pots are growing and will be able to see in real time, whenever they want, the total income they are on track to have in retirement.
“This is a massive technological undertaking and it’s likely to be a few years yet before dashboards are launched and people are interacting with them in these ways. However, it will be worth the wait.”
