How would a lack of government support affect dashboard progress?

It is widely accepted that the dashboard would significantly boost savers’ engagement with their pensions, helping them keep track of the numerous pots that are established every time they move jobs.

The withdrawal of the DWP’s support for the project, if that happens, is likely to have an impact on consumer confidence

Dan Taylor, Trafalgar House

Importantly, many also agree that administering the dashboard in collaboration with the government would bolster consumer confidence, not only in the service but also in the wider pensions industry.

In June, as part of its response to a Work and Pensions Committee report on freedom and choice, the government agreed that there is a strong case for mandating all pension providers to give necessary information to the pensions dashboard. The Department for Work and Pensions added that it will consider coverage and legislation in its feasibility report, which is yet to be published.

But The Times newspaper reported on Tuesday that sources say secretary of state for work and pensions Esther McVey has moved to kill off the project – she is said to believe that the service should not be provided by the state, and that it would distract from efforts to roll out universal credit.

A DWP spokesperson said: "When we have an announcement to make we will make it." The spokesperson said the report was speculation.

What would it mean for savers and the industry if the dashboard were to lose government support?  

“It is just speculation at the moment,” said Richard Butcher, managing director of professional trustee company PTL. “If it is confirmed, I think it would be hugely disappointing for a lot of people who have put in a lot of time and effort to try and land this.”

Andy Tarrant, head of policy at The People’s Pension, said the dashboard is only going to be really useful if all pension providers are supplying information to it. “Without a government requirement that all providers participate, there probably will be providers that do not,” he said.

Cracking consumer confidence

He added there would also be problems “if there’s not an objective, neutral calculation regime,” resulting in each provider designing its own and building in different assumptions.

When savers try to consolidate pensions, this could mean they “will be told by every single provider that they’ll be better off consolidating with each of those different providers, which is then going to destroy their confidence in the whole system”, Tarrant noted.

Getting the right regulation and data protection rules in place would involve quite complex legislation.

“If the government doesn’t do the dashboard itself and instead goes down the road of allowing multiple dashboards, for those actually to work in a way that will make this useful for consumers, they’re going to need a complex piece of legislation. The chances of them doing that in this parliament I would have thought are zero,” Tarrant said.

He said there could be multiple dashboards in the long run, but “if we really want to do this we have to start with the government dashboard first”.

Dan Taylor, director at third-party administrator Trafalgar House, also said that “the withdrawal of the DWP’s support for the project, if that happens, is… likely to have an impact on consumer confidence” in the dashboard.  

“How will the end user perceive this service if it’s not a government-backed service?” he asked.

Taylor said most people in the market believe consumers could look at the dashboard with “a certain degree of suspicion, because it will be a commercial provider... supplying access to this data”.

Many would be aware that if a commercial provider is providing a free service, they are likely to want to market their services to users and get some sort of commercial return.

The Pensions Dashboard Prototype Project was launched in September 2016, with plans for the government, regulators and pensions industry to make the service available online from 2019.

A missed opportunity

If government support is withdrawn, Taylor said he believes that the dashboard, in one form or another, will still be delivered because there are huge benefits not only to members but also to the pensions industry in general.

Adrian Boulding, director of policy at Now Pensions, said “it would be a huge missed opportunity” if the government were to withdraw its support.

In 2011, research by the DWP indicated that UK employees have on average 11 jobs in their careers, with a quarter of workers working for more than 14 employers. 

Under the current system, every time someone changes job a new pensions pot is established.

“I categorise [the] dashboard in the group of things that once we’ve got it, we’ll wonder how on Earth we managed without it – a bit like refrigerators or the internet,” he said.