Work and pensions secretary Esther McVey has said she "backs the industry" to deliver the pensions dashboard, but key details including whether the government will compel schemes to submit information remain unclear.
The secretary of state said legislation would be used where necessary to "ensure that the interests of pension holders are safeguarded and personal information is protected", but that the project will be driven by innovation in the private sector.
“It’s clear there is broad support for the concept of a dashboard and its potential to empower those putting money away for their futures," said McVey in a statement. “By taking a leading role, and harnessing their knowledge, industry can develop a dashboard that works for pensions holders – and government will help facilitate this.”
Passing it onto the private sector means there is no guarantee of compliance from all providers
Jack Dromey MP
Press speculation that McVey was keen to drop the policy was rife, but government sources said the secretary of state is "committed to delivering this dashboard", albeit with the industry in the driving seat.
Labour slam DWP
However, the defining features of the dashboard will not be confirmed until the government has carried out a feasibility report, to be published at an as yet unknown date.
Key questions will include whether schemes and providers, some of which hold member data in outdated and even paper-based systems, will be compelled to submit benefit information to the new system when it is created. Experts fear the dashboard will be of limited use if coverage is not universal.
It is also unclear whether the government will stick with its conviction, outlined in June, that "the idea of multiple dashboards confuses users".
Shadow pensions minister Jack Dromey was quick to round on this lack of guarantees, calling the decision to let industry take the lead on design “a cop-out by the government”.
“Passing it onto the private sector means there is no guarantee of compliance from all providers, no indication of whether the state pension will be included, and centralises huge amounts of financial information for the private sector to access,” he said in a statement.
Compulsion is key
David Brooks, technical director at consultancy Broadstone, agreed that without compulsion the project “is a dead duck, at least to a generation”.
He said compelling small defined benefit schemes with limited resources to comply would meet with some resistance, even if people accept data quality needs improving.
That could lead to a defined contribution-only dashboard best suited to millennials who, years from retirement, are “the people that will probably use it and need it the least”, he said.
Committee reassured over dashboard utility
The creation of a pensions dashboard is a crucial step in improving the retirement outcomes of the UK's savers, transparency experts told MPs on Tuesday.
Speaking to the Work and Pensions Committee’s inquiry into pensions cost transparency, Chris Sier, the chair of a Financial Conduct Authority working group on costs, said the dashboard alone will not solve the UK's low saving rates, but that it would increase awareness of pension adequacy.
“At its most basic iteration, it is nothing more than an information service to help people make the first step, which is helping us understand what we’ve got,” he said.
“What it doesn’t do is help people to decide what to do about it, but it is the very first and very important step,” he added.
It is nothing more than an information service to help people make the first step, which is helping us understand what we’ve got
Chris Sier, Institutional Discloure Working Group
UK saving at ebb
At the end of the first quarter of 2018, Britain’s household savings ratio stood at just 4.1 per cent, according to the Office for National Statistics.
“That’s a huge worry,” according to Andy Agathangelou, founding chair of the Transparency Task Force.
“The industry, government, policy-makers, rule-makers, must work together to help rebuild the trust that this industry has lost over the last few decades, and the pensions dashboard is a tactical and strategic vital component in doing that,” he added.
Is the government serious?
The dashboard has received widespread support from the pensions industry and consumers. An online petition urging its implementation has attracted 150,000 signatures so far.
It has, however, taken years to get off the ground. The concept of a pensions dashboard was first announced by the FCA in December 2014.
When asked whether he thought the government remained serious in its commitment to the dashboard, Agathangelou was optimistic. “I’d like to think they are,” he said.
Chris Sier offered a smile. “I think that says it all,” said Conservative MP Heidi Allen, who sits on the Work and Pensions Committee.
