Savers to have pensions data at their fingertips as dashboard gets go-ahead
Pensions dashboards enabling people to see details of their retirement savings in one place have been given the green light, with initial industry models expected this year.
The Government said savers will be in the driving seat, with all the facts and figures about their pensions and potential retirement income at their fingertips in one place for the first time – on smartphones, tablets and computers.
Experts welcomed the move, saying pensions need to be brought out of the “digital stone age”.
At the moment, when people build up savings with different employers for when they retire, they can only look at these pension pots separately.
The Association of British Insurers (ABI) has previously designed and delivered a prototype pensions dashboard service for the Government.
Work and Pensions Secretary Amber Rudd said: “With record numbers saving for retirement as a result of our revolutionary reforms, it’s more important than ever that people understand their pensions and prepare for financial security in later life.
“Dashboards have the potential to transform the way we all think about and plan for retirement, providing clear and simple information regarding pension savings in one place online.
“I’m looking forward to seeing the first industry dashboards later this year.”
The plans, published in its response to a consultation, include a commitment to bring forward legislation at the earliest opportunity to compel all pension providers to make consumers’ data available to them through a dashboard.
There is also an expectation that the majority of schemes will be ready to go live with their data within a three to four-year window.
State pension information will also be included as soon as possible, the Government said.
As well as giving people an overview of all their pension savings, pension dashboards could also help reunite people with pension pots they have lost track of.
Alistair McQueen, head of savings and retirement at Aviva, said: “We need to bring pensions out of the digital stone age.
“By doing so, the potential for savers is enormous. Official figures report that just 7% of us use the internet to manage our investments such as pensions, compared to 69% for banking.”
The Government said the industry has told it that initial models will be developed and tested from this year.
A non-commercial dashboard will be delivered and overseen by the new Single Financial Guidance Body (SFGB).
An industry group will be brought together by the SFGB which will set out a timetable to drive progress.
Yvonne Braun, director of long-term savings and protection policy at the ABI, said: “The digital retirement revolution is here at last.
“All the pieces are being put in place to deliver the easy access to retirement information everybody needs and that the pensions industry is so keen to deliver.”
Gareth Shaw, head of money at Which?, said: “It is encouraging to see the important recognition that all schemes must be included in dashboards, allowing consumers to finally see all of their pots in one place – so the Government must introduce legislation to ensure this is achieved.
“We welcome the crucial commitment to including the state pension.
“Dashboards won’t be complete without this vital component so it must be included at the earliest opportunity.
“Every dashboard must display all the important information consumers need in a clear and accessible way, allowing them to easily understand their pension savings and the costs involved.
“The delivery group has been tasked with some massive decisions that will determine the dashboards’ success – so we must see a clear commitment to delivering consumer-friendly tools within a swift time frame.”
Kate Smith, head of pensions at Aegon, said: “There’s a lot of work that will be required by providers to ensure scheme information is accurate, secure and available within the suggested three to four-year window.”
Helen Morrissey, pension specialist at Royal London, said: “If done properly, the dashboard will give people a full understanding of what they have saved.
“If it is rushed, or we don’t have all interested parties on board from the beginning, there is a risk that we will not be able to deliver something meaningful or credible and the opportunity to engage people will be lost.”
Some experts also suggested pensions dashboards could lead to people seeing more financial products grouped together.
Tom Selby, senior analyst at AJ Bell, suggested: “Over time, dashboards could potentially expand to include other savings vehicles and financial products, effectively allowing people to see all of their finances in one secure place.”