The Association of British Insurers has called on government to legislate for schemes to provide their data to the pensions dashboard amid criticism a hasty delivery could leave the project failing consumers.
Bringing UK pensions in line with other countries, early last year the Treasury under George Osborne had challenged the industry to come up with a live dashboard for consumers by 2019, following a recommendation made by the Financial Conduct Authority. A group of companies led by the ABI produced a working prototype in March this year.
Consumer groups favour compulsion and 'public good' dashboard
The ABI leads its recommendations for next steps on the delivery of the dashboard with a call for legislation, to force providers and schemes to make their data available for inclusion in the dashboard. It also wants a government-run dashboard alongside private sector versions.
They should delay the launch until it’s all inclusive
Richard Butcher, PTL
Its report says interviews with seven consumer groups have shown that five of them thought compulsion was necessary to gain full market coverage to provide maximum value for consumers.
Four consumer groups stated that there should be a non-commercial dashboard, and two of them wanted there to be no commercial offerings at all. The new single financial guidance body due to replace Pension Wise, The Pensions Advisory Service and the Money Advice Service could run such a non-commercial dashboard, according to the consumer groups cited in the report.
The ABI is also calling for an implementation timetable and a dedicated body to establish standards for all involved.
Scheme participation will be critical
The calls on government to compel schemes and set out a timetable show the huge time pressure the project is under, as well as concerns that while something could be delivered in 2019, it might not be good enough to win consumers’ trust if large amounts of data are missing.
It is unclear if government will find the time to consider the dashboard while Brexit negotiations are tying up much of its resource, although the Treasury has previously not ruled out legislating to make it happen.
In September 2016, then-economic secretary to the Treasury Simon Kirby said: "If there are difficulties getting everyone on board, then we’ll certainly look at legislation or regulation instead.”
On Thursday, a spokesperson for the Treasury said: “We are fully committed to making the pensions dashboard a reality and we will set out the next steps in due course.”
Darren Philp, director of policy and market engagement at mastertrust The People’s Pension, chaired the consumer research strand undertaken for the ABI’s report. He said he had no doubt compulsion is a must.
“We did some international outreach to look to countries that had something similar to the dashboard. Almost universally the piece of advice they gave was, ‘Get legislation in place first’,” he said. “I’m not saying everyone needs to be on there from day one, but it needs a timetable.”
Philp said a publicly delivered dashboard is needed to build consumer trust in the project.
In September last year, Kirby made it clear that more than one dashboard was expected.
But Yvonne Braun, director of policy, long-term savings and protection at the ABI, said privately delivered dashboards did not exclude a government-provided option.
“This is not an either or situation. The consumer research done during the most recent part of the dashboard project has indicated that a non-commercial, government-backed dashboard operating alongside services offered by third parties will encourage trust and confidence in this new approach to providing pensions information,” she said.
Should the launch be delayed?
For Richard Butcher, managing director of professional trustee company PTL, a pensions dashboard needs to be complete before going live.
“What I’m nervous about is the almost undue haste at which they’re pursuing this,” he said. “They should delay the launch until it’s all-inclusive with state pension, defined contribution and defined benefit.”
Dashboard prototype launch prompts next steps
Plans to deliver a pensions dashboard prototype by March 2017 have been completed, despite the complex nature of technology infrastructure involved. But while experts think the progress is encouraging, they say more needs to be done to maintain this momentum.
He warned that if people accessed the dashboard only to find gaps in their data they might not return to it.
Butcher was in favour of legislating for compulsion but said schemes needed time to create the necessary infrastructure to be able to share data. He added that a publicly provided dashboard was “imperative”.
A phased implementation, where a dashboard is available from 2019 but does not offer all functions — such as transfers or contributions — appears to be the ABI’s favoured approach.
Sweden had a similar take when its own dashboard was implemented, a process that took more than a decade, according to Royal London research. Of the 5.5m eligible working-age population, around 2.65m are registered with the site.
Mark Sullivan, senior vice-president at Fidelity Benefits Consulting, criticised participation rates and the time taken to fully deploy the current model in Sweden.
He said Sweden “struggled getting the outcomes they wanted”, finding that merely providing information was not enough to engage people.
