Delivering on the dashboard
Why the pensions dashboard simply can't come soon enough for UK savers...
We've all lost our car keys at least once in our lives; that sudden realisation that something you’re so sure was where you left it has vanished into thin air just when you desperately need it.
Thankfully, innovation has been on hand to help. The development of countless apps and gadgets that now allow you to find your missing car keys, house keys or phone. The message is clear; if something is valuable, then technology is a great way to help you keep tabs on it.
So why is that not the way with something so important as people’s pension savings? Research by The People's Pension, and carried out by YouGov, found that currently, three in 10 people don't even know who their current workplace pension is with, and more than one in 10 aren't sure of how many pension pots they have.
With the average person building up 11 pension pots over the course of their lifetime, there's a very real risk that many of them will end up lost or forgotten, potentially leaving millions of people missing thousands of pounds they should have for their retirement.
A Pensions Dashboard – designed to let you see all your pension pots together online – could revolutionise retirement planning and become the missing link that many people need to help them connect the dots between their savings and how much they’ll have to live on in retirement.
The pensions industry has been working with the government, regulators and technology companies to create a working prototype and look closely at what needs to be in place to make the Dashboard as useful as possible for savers across the UK.
The Pensions Dashboard has received support from MPs of all parties, with the Work and Pensions Select Committee calling for legislation to ensure all pension providers supply the necessary information to a single, public-good dashboard that's hosted by the new single financial guidance body.
But it can only be successful with continued government backing. Without it, the dashboard cannot become the one-stop shop it's intended to be. There won’t be a central source of data; people will only see half their pension picture as without legislation many pension providers simply won’t play ball; and the state pension and public pensions may not be included.
When almost eight in ten people don’t know how much the state pension will provide them, and one in five people admit to having lost a pension pot, dealing with the issue now is essential to help people to keep track of all their savings.
A single pensions dashboard would allow people to have all the information they need to make the important decisions about their financial future and would enable them to watch all their retirement savings grow and compound over time so they have a true picture of what their retirement might look like.
While there have been some calls across the industry for multiple, commercially driven dashboards, pursuing this would only serve to kick a helpful and essential technology into the long grass.
In order for multiple dashboards not to mislead consumers or even worse lead to their detriment, there would need to be a new set of rules that deal with consumer protection and data protection, such as an agreed way to calculate how much future income a current pot would be worth.
While there may be advantages for consumers in the future if multiple dashboards were ultimately created, a public, single dashboard is an important first step forward. It would create consumer confidence, make pensions real for people by demystifying them and allow people to take ownership and control over their retirement savings.
And it's what savers are calling out for. More than seven in 10 people told The People’s Pension that they want to be able to access all of their pension savings in one place.
We have already seen in countries where a dashboard has been rolled out that engagement has increased. In Sweden, 50 per cent of the working population has registered to use its public-good dashboard, which has data fed in from every Swedish commercial pensions provider, as well as the state.
The advantages for consumers of a dashboard are clear. A working prototype of the dashboard already exists. The industry is willing to fund the dashboard. It really should be all systems go on the government’s part.
The People's Pension is a leading master trust (multi-employer pension scheme), provided by not-for-profit organisation B&CE, serving almost 4 million members and more than 80,000 employers across the UK. Follow @PeoplesPension.