The UK pension dashboard debate

Grasp the issues the dashboard raises for advisers and learn what would make it a success

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The UK’s pension dashboard has been debated in policy circles for at least a decade, but it was former chancellor George Osborne who gave it real momentum by announcing support for it in his Budget speech in 2016.

Since then, government has blown hot and cold on the project, from organising workshops in Shoreditch ‘tech garages’ and industry working groups, to heady optimism and promises of action, all the way to recent rumours of cancellation.

Early this summer, the secretary of state for work and pensions Esther McVey was reportedly poised to scrap the project, prompting a petition that garnered more than 125,000 signatures in its support.

Possibly as a result, the dashboard has now been reprieved, but there were audible groans from many in the pension sector as the ball was sent spinning back into the industry’s court.

In a statement at the start of September, McVey said: “It is clear there is broad support for the concept of a dashboard and its potential to empower those putting money away for their futures.

“By taking a leading role, and harnessing their knowledge, industry can develop a dashboard that works for pensionholders. Government will help facilitate this.”

What should the dashboard include?

Nucleus product technical manager Rachel Vahey is uncertain how committed the government is to the programme.

She said: “At first sight, the announcement showed the government is not yet willing to consign the dashboard to the dustbin of initiatives. But on closer inspection, we should ask if we are any further forward.

“An ideal dashboard should show details for all the pension schemes someone is a member of. Without a commitment from government that it will legislate for all schemes to participate, the big advantages a dashboard can offer, such as tracking down pension schemes long forgotten, will be lost at the first hurdle, and that will dent people’s confidence in this initiative.”

Financial Technology Research Centre director Ian McKenna said that if the dashboard had maintained its original momentum it would have been deliverable in the near future, but that it might now have been neglected too long.

He said: “I think the government are handing it back too late. If it had maintained the original momentum it could have been delivered early next year.

“I am increasingly of the view that a dashboard that only looks at the pension market won’t be fit for purpose. It should include different savings products and make information on those available side by side with pensions.”

The auto-enrolment factor

McKenna also suggested that large parts of the trust-based pension market were in a total mess regarding their recordkeeping and there was a risk of “rubbish in and rubbish out”.

He said the focus should be on an auto-enrolment project that could be delivered quickly.

Adviser and Cavendish Ware associate director Roy McLoughlin agreed wholeheartedly.

“We have to have the dashboard because of auto-enrolment. All the younger members need to see their pensions in one place on one screen,” he said.

“I am talking to young people who have already moved jobs once or twice and are asking that question.”

Is there a role for advisers?

Another issue raised by many advisers is that they may be left out of the process. McLoughlin added: “My big beef is the suggestion that advisers don’t need to see their client’s screen. Whether they are sitting next to us or remote, they want us to be able to see the same thing as them.”

Some advisers remain pessimistic. Rowley Turton Private Wealth Management director Scott Gallacher said: “Without active government support I fear it’s a dead duck. Without government compulsion what reason is there for individual pension schemes, especially small occupational schemes, to commit scant resources to this?

“I suspect the government will bail on providing state pension info, which, as the key part of most people’s retirement planning, will make the whole exercise somewhat pointless.”

He added: “The exclusion of advisers to date has also been less than ideal. Many people would prefer an adviser to be able to look at things for them and advise them what to do, how much to pay in, and so on.

“If it did work and advisers had access, then it would speed up the fact-finding and advice process considerably, improve access to advice and go some way to addressing the current advice gap.”

Vahey concluded: “The feasibility study will tell us whether participation has to be mandatory as well as whether the government will commit to feeding through state pension and public sector pension scheme information.

“Both are necessary if the dashboard is going to be a true success, rather than just a coalition of a handful of providers.”

Further reading:
UK puts pensions dashboard responsibility on industry

By John Lappin

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