The government’s failure to commit to a rollout timetable for a new pensions dashboard with state pension data was criticised on Saturday by the Work and Pensions Select Committee.
The committee said the government was “missing a trick” by rejecting its call to publish the timetable for a non-commercial service by the end of 2019.
The government has put the Money and Pensions Service in charge of delivering dashboards, including by hosting a non-commercial iteration.
Without total coverage of people’s pensions, both state and private, the impact of the reforms and usefulness of dashboards in enabling better retirement decisions will be limited
Tom Selby, AJ Bell
However, MPs criticised the failure to provide a timetable for the release of this service or commit to including state pension data upon the launch of the dashboard. The committee warned the government was being complacent about transparency failings in the pensions industry.
Committee chair Frank Field said: “Why does the government insist on missing a trick like this? We clearly need a central, national pensions ‘account’, that every individual could access, not only to monitor directly how their own retirement savings and planning is shaping up, but also to genuinely compare all the vying ‘offers’ to manage their savings.
“This requires that the dashboard has details of the size of the state retirement pensions.”
Dashboard enhances transparency
The select committee argued the pensions dashboard would provide a solution to the transparency problems underpinning the pensions industry, allowing savers to plan for retirement by featuring retirement income targets and enabling value-for-money comparisons.
The MPs also criticised the Financial Conduct Authority for its response to the committee’s requests, arguing that its decision not to cap charges on the new investment pathways in retirement at 0.75 per cent would see it rely on “vague threats” to safeguard value for money.
AJ Bell senior analyst Tom Selby said: “I hope the government is just hamstrung by Brexit and the upcoming election rather than missing a trick. For dashboards to be really effective users need to be presented with all their pension information, including the state pension.
“It’s important as we move into 2020 that a full timetable is established to give certainty to both savers and the wider industry.”
State pension essential
Mr Selby added: “The state pension is a significant part of most people’s retirement plans, and without it members wouldn’t have a complete picture upon which to base their retirement decisions.
“It is critical the government makes this information available via dashboards as soon as possible. Without total coverage of people’s pensions, both state and private, the impact of the reforms and usefulness of dashboards in enabling better retirement decisions will be limited.”
He said he would be surprised if pathways solutions charged more than 0.75 per cent, adding that if they did intervention may become justified.
“I’m generally not a fan of price regulation when you have an active, competitive market as it limits choice,” he said.
