Forget big talk about a pension dashboard – it’s simply not going
to happen any time soon, says Teresa Hunter
The thing I object to most about the concept of a pensions dashboard is the word ‘dashboard’. It is such a masculine concept.
On one level that’s OK. Men, after all, are still the ones with the lion’s share of pension savings. But I thought the purpose of the exercise was to help and engage the disenfranchised, a large proportion of whom are women.
The minute I hear the word ‘dashboard’ I flip into a panic and reach for the gearstick. It’s a subliminal response to years of having men sitting beside me in the car – from driving instructors to boyfriends, husband and now sons – and telling me what a terrible driver I am.
Getting the language right was Bill Gates’ pure genius. He could have called his computer operating system Crankshaft, or Geeksville. But instead he chose Windows. An inspired choice – not at all threatening and something everyone could relate to.
If I recall correctly, we all learned to love windows when in the nursery. BBC Two’s Play School – subsequently shown all around the world – led generation after generation ‘through the window’ into an exciting new world on the other side.
So why does it have to be a pensions ‘dashboard’? Why not a pensions house or door or library or, indeed, even a pensions window? What about a pensions kitchen? The kitchen is the hub of the house where everything gets fixed.
But it doesn’t really matter what we call it, does it? Because it is not going to happen, despite almost everyone saying what a good idea it is, from the FCA and Which? to the Chancellor and captains of the industry. Not soon, anyway.
The idea is to have one place where individuals can go online to study their pensions entitlement in entirety. This would encompass state pensions, personal plans, Sipps and occupational entitlement, including defined benefit schemes.
Such ‘dashboards’ already exist in Australia, Denmark and the Netherlands, so proponents argue that the technology is in place. Indeed it is, although analogies with other countries should always be treated with caution when our disparate pensions landscape is involved.
For example, I am told there are around 1,000 DB occupational schemes with fewer than 100 members. How will they cope with providing real-time valuations and updates?
Insurance companies are sitting on piles of paper files relating to historic closed policies and funds, which have never been anywhere near a computer. Will the insurers be compelled to upload all this data?
Maybe they should. It would prevent them withholding information from policyholders that could later be of value to them. How many companies shrouded the existence of guaranteed annuities in secrecy to prevent consumers exploiting them to the full?
More open information would clip the industry’s wings. But to justify its establishment it would have to be meaningful, comprehensive, contemporaneous and complete. So it would be expensive. And who would pay? Policy-holders, naturally.
It would take enormous political momentum to get off the ground. Realistically, the Department for Work and Pensions is otherwise engaged, trying to avoid a fiasco with the launch of the new state pension and making a success of auto-enrolment. Indeed, the DWP itself is part of the problem.
For the dashboard to work, full state pension benefits would have to be included. Given it is a struggle to send out meaningful information in the DWP’s current forecasts, it would likely prove challenging for the Government to provide up-to-date and accurate information instantly to the entire nation.
Why would it want to, anyway? Pension forecasts already annoy those individuals who receive them. Is it good politics to antagonise the entire nation unnecessarily?
Currently, the DWP is supposed to be testing consumer reaction to the dashboard – which is another important factor. Too much information is not always a good thing; discovering they have £100,000 in their pension may be too big a temptation for some consumers.
But how this testing is taking place is also a mystery. When I drilled a bit deeper, I was told the DWP was studying what consumers did – what actions they took – after using such a dashboard.
“Oh, so they have some dashboards up and running, do they?” I asked. Silly question. Of course they don’t.