The reality is there will have to be tough trade-offs as the industry comes together to deliver pensions dashboards says ABI head of retirement policy Rob Yuille
The Pensions Dashboard has made remarkable progress in the past 18 months. This initiative – which sounds so simple but is in fact so complicated to deliver – has been taken from concept to working prototype, with a blueprint laid out for how to turn it into a live service. It has been formally adopted by the Department for Work and Pensions which is committed to leading on the next stage. For anyone who cares about consumers feeling empowered and well-informed about their financial circumstances as they approach retirement, there is a great deal to celebrate.
The reaction has been overwhelmingly positive about the concept, but with some concerns raised – on one hand, in the House of Lords this week, about the importance of governance and security with scepticism about anything other than one centrally run dashboard; and on the other hand, the importance of delegated access so that customers can allow others – financial advisers, family members – to access their information on their behalf, as most effectively described by Roy McLoughlin in Corporate Adviser.
As the DWP considers options for delivery models, it will face tough, complex trade-offs, with stakeholders competing for attention with opposing views. These are the same trade-offs we faced in the project we ran with sixteen contributors from across the industry. Build something as soon as possible, or wait until we have something all-singing, all-dancing? Focus on the automatic enrolment population first, or those making retirement decisions now? If DC pensions are ready to go, should we wait for DB pensions?
Based on consumer research, international examples and engagement with hundreds of people across the industry, we set out what we think are the requirements for policy decisions and a minimum viable product, or MVP. MVP means just that: what are the minimum features that make dashboards useful for consumers?
We received strong feedback on many issues, not least the question of whether delegated access should be available. However, the very strongest steer we received from the widest range of stakeholders was to keep it simple, and not to let the perfect be the enemy of the good.
This is the reason for the project group’s decision to say that delegated access is not part of the MVP. But it has been misinterpreted as a decision that adviser access to the dashboard should not, or will not, happen. That is untrue. Like many other features – data on charges, investment performance, income from pensions in payment – delegated access should become part of the dashboard infrastructure. But can we all say, hand on heart, that dashboards should not be available without them? Especially as consumers will be always able to share the information with whoever they choose once they are in receipt of it.
Further, a narrow debate about whether any feature ‘should’ or ‘must’ be available misses the wider point: will it be vital in reality, and what is needed to make it happen?
This is not in the industry’s hands. If we want the dashboard to include the State Pension, we need a digital identity solution that satisfies DWP and Government more widely. The Government’s digital ID solution, GOV.UK Verify, does not currently support delegated access for example.
It’s encouraging that one of the project’s partners, Origo, has worked closely with both DWP and the Government Digital Service on one possible solution, which enables delegated access and meets the Government’s technical standards. But it does not mean that the Government is yet ready to implement it or that the non-technical questions have been answered.
I agree with Roy that the industry needs to stand together. But this must include acknowledgment of the tough trade-offs in delivering dashboards, and remaining positive about the concept. The more mud is slung at it, the more likely the Government will retreat to the safest, least innovative option.
Financial advisers are among the third parties we expect to offer dashboard services. We want consumers to be able to feel the benefits of dashboards as soon as possible and it would be wrong to delay it until every single additional feature is in place.
It’s good to see most financial advisers are embracing the potential of pensions dashboards and rightly see it as two steps forward, not one step back. We have long been clear about the importance of good financial guidance and advice to those preparing for retirement and want to see more people taking it up. Those committed to offering quality advice will always have a role to play in supporting customers.