LCP has warned that current proposals could create ‘dumb dashboards’ of limited use to consumers who will then be forced to transfer their data to somewhere less regulated, risking fraud.
The DWP’s consultation on pension dashboards ends on March 13th. According to current plans, all dashboard providers will be required to offer member data in a consistent manner, with strict restrictions on ‘manipulating’ the basic data or presenting the data in a different way.
Depending on the final design standards, this could prevent ‘added value’ services like modelling the impact of increased contributions or working longer on retirement income.
DWP say explicitly in their consultation: “Our aspiration is that restricting the way in which view data can be presented and manipulated on dashboards will help to build trust and confidence in the information shown” (Chapter 1, para 25)
But it is expected that users will be able to ‘export’ their information so that it can be utilised on other sites.
DWP go on to say: “However, [qualifying dashboards] are not prevented from offering people the ability to export their data away from the dashboard, either to another page within the [dashboard] provider’s system, or beyond” (Chapter 1, para 26)
LCP has warned that taking a cautious approach could lead to customers transferring their data to somewhere less regulated, increasing the danger of frauds or unwise judgments.
LCP also says that having ‘fully interactive’ dashboards to assist customers in considering their options is preferable to having ‘dumb dashboards’ where consumers are exposed to less carefully controlled interactions on other sites.
Providing dashboards would be regulated by the FCA which means that authorities will have a higher chance of safeguarding clients from unethical practices if they stay on the dashboard site rather than leaving due to a lack of functionality.
Other points raised by LCP in their consultation response include the risk of a ‘dash for cash’ as pension businesses seek to use dashboards to harvest dormant pension assets on the basis of heavy marketing and investment in technology, the dangers of a ‘big bang’ launch of dashboards when the entire working-age population could become eligible to log on to dashboards on a single day and the lack of available ‘Integrated Service Providers’ (ISPs) for schemes to choose from.
LCP partner Steve Webb says: “The desire to protect consumers is understandable, but if this results in ‘dumb dashboards’ then this could do more harm than good. Simply seeing all your pensions in one place is the start of a journey, not the end. If dashboards themselves are severely restricted in the support and services they can offer, consumers will simply take their data elsewhere, almost certainly to a less regulated environment. The best antidote to scammers and poor choices is to provide more help and guidance within the dashboard environment, rather than to drive people off”.
