Pension managers expect spike in member activity from dashboards

The largest pension providers in the UK were expected to have connected to the Pensions Dashboards Programme’s (PDP) system by 30 April, according to the timeline set out by the Department for Work and Pensions last year. 

This first contingent includes defined contribution (DC) master trusts with more than 20,000 members, as well as annuity providers, personal pension providers and stakeholder pension providers with at least 5,000 members. 

The next deadline, 31 May, applies to DC auto-enrolment schemes with more than 5,000 members and other DC schemes with more than 20,000 members. The largest defined benefit and hybrid schemes should also be connected by the end of May.

As yet, only one provider is known to have fully completed the PDP’s connection tests. However, regulators have promised not to take action against those who miss the deadline, as long as they are making substantial progress.

The impact of the MoneyHelper dashboard

Consultancy group WTW recently polled pension scheme managers and found that 31% expected at least half of their scheme’s members to log on to the MoneyHelper pensions dashboard within a month of gaining access. 

MoneyHelper is the government-backed dashboard currently in development, with live user testing expected to begin later this year. 

“We need to be well prepared for that [increased activity] because it’s very important for savers to have trust and confidence in dashboards right from the start.”

Geraldine Brassett, WTW

Once members are able to see their pensions on a dashboard, by far the biggest challenge anticipated by pension scheme managers was an increased volume of enquiries for administrators and pension providers (71%). 

Just 17% were concerned about the industry’s capacity to deliver dashboards, and just 8% of managers thought the biggest challenge would be dealing with members that were worried about their pension provision. 

Geraldine Brassett, a senior consultant in WTW’s outsourcing business, said: “When members first have access to the MoneyHelper pensions dashboard, we do expect to see a large increase in activity across the industry. 

“We need to be well prepared for that because it’s very important for savers to have trust and confidence in dashboards right from the start.” 

She added that some members may not have made contact with their scheme for several years, but dashboards may bring pension saving into focus for many. 

Brassett also highlighted that different groups of people may use dashboards differently. 

“Younger savers may want to know what a defined contribution scheme is, how they invest and how much they should save,” she said. “Those approaching retirement may want to know about transfer options and when they can afford to retire. 

“We recognise that this is likely to prompt a lot of questions from members who are not fully familiar with their pension provision so, as an industry, we need to provide information and education for members of all types.” 

Private sector dashboards

Pension managers also told WTW that private sector dashboards would be a welcome addition to the industry landscape. 

Approximately a third (32%) of respondents said they would like to see private sector options within six months of the MoneyHelper dashboard being released, and 39% thought six to 12 months was more likely. 

However, Richard Smith, an independent dashboards consultant, recently told MPs that it was unlikely that any commercial provider would launch a dashboard under the regulatory regime currently proposed by the Financial Conduct Authority. 

Smith has disbanded the Pensions Dashboards Operators Coalition, of which he was volunteer chair, due to these concerns. 

“Industry views private sector dashboards – those provided to savers by pension providers themselves – as an important part of how people will engage with dashboards” said WTW’s Brassett. 

“As administrators we need to make sure that we hit the mark to support savers whichever way they decide to use dashboards, be that the government’s dashboard or a commercial version.”