Pensions dashboard prototype to launch by next spring

The dashboard is the first of its kind in the UK and is due to go live in 2019. It will enable users to keep an eye on their retirement savings by seeing the value of their different pensions in one place. It is anticipated that people will be able to plan for retirement while tracking down any lost pension pots they have built up with previous employers.

On Monday the Treasury announced that it will be joining forces with a host of companies from the pensions industry – Aviva, Aon, HSBC, LV=, Nest, Now Pensions, The People’s Pension, Royal London, Standard Life, Zurich and Willis Towers Watson – to put the prototype together by next spring. The pilot project will be managed by the Association of British Insurers.

When the dashboard is mentioned in, say, EastEnders, then we’ll know it has succeeded

Barry Mack, Muse Advisory

Fiona Tait, pension specialist at mutual insurer Royal London, said that the dashboard is “hugely positive” and “has a great potential for improving consumer outcomes”.

It will also help advisers by making their advice process more efficient, as well as increasing accuracy, she said. This may reduce costs or allow consultants to spend more time concentrating on clients' other needs and objectives.

Consumers have high expectations with regard to managing their finances online, according to Morten Nilsson, chief executive of mastertrust Now Pensions.

“At the moment, the pensions industry is a long way behind other sectors, and the pensions dashboard will be a major step forward. Done in the right way, the dashboard will help build both understanding and engagement. This is especially important with auto-enrolment, as savers will have more pension pots than ever before,” Nilsson said.

Making pensions more mainstream

However, increased engagement often depends on the right communication, according to Barry Mack, client director at governance consultancy Muse Advisory.

“If people don’t know about the tools or how to use them, they won’t access them. People have to want to be educated, and tools are just one means of doing that,” he said.

“Some savers will be driven to understand what their retirement will look like from a financial perspective; others might expect it to be done for them, be scared about it, or possibly be of the view that ‘what will be will be’,” Mack added.

He noted that education can come from different perspectives and modes of communication. “Advances in technology are just one part of that. Perhaps the dashboard will help pensions to become more mainstream," he said. "When it is mentioned in, say, EastEnders, then we’ll know it has succeeded.”

Tom Selby, senior analyst at investment platform AJ Bell, said: “The big challenge for the government in building the pensions dashboard will be getting the legacy providers with rusty old technology to sign up. Ultimately it may require legislation to get these schemes to play ball.”

Nevertheless, he said that the platform has the potential to revolutionise consumer engagement in long-term saving, "so it is good to see the project progressing”.

Greater interest in what trustees are doing

Vassos Vassou, senior trustee representative at Dalriada Trustees, said one of the potential hurdles in making the dashboard a success could be how comprehensive the data is.

“Members will have accrued benefits through different providers or with different employers, and somehow that data needs to be collated into one database,” he said.

He added that one of the big challenges trustees face is around communication and member engagement.

The dashboard may prompt more people to start taking an interest in their pensions. Members’ increased interest in their benefits could mean that trustees are going to be under even more scrutiny, Vassou noted. He said this “places even more importance on the job that trustees are doing”.

Tim Middleton, technical consultant at the Pensions Management Institute, said: “The dashboard will provide accurate and up-to-date information, which will allow advisers to provide better, focused advice."

However, he cautioned that the dashboard cannot take the burden of decision-making off people's shoulders. “The dashboard provides information; effective use of retirement savings will still require advice from an appropriately qualified professional,” he said.