• Pension schemes won’t be compelled to connect to Pensions dashboards until 2023, a delivery group tasked with implementation has confirmed today
• Government will face criticism for delaying reforms after originally indicating it wanted to introduce dashboards from 2019
• However, given the importance of data accuracy and getting maximum participation, rushing the introduction of dashboards would have been a huge and unnecessary risk
Tom Selby, senior analyst at AJ Bell, comments:
“Rushing the introduction of half-baked pensions dashboards would have risked causing terminal damage to a project which has the potential to revolutionise retirement engagement in the UK.
“Allowing people to see all their retirement pots in one place is a colossal undertaking, particularly when you consider the hotchpotch of different schemes that exist.
“While most modern platforms are well positioned to do this, some older-style pensions and defined benefit schemes are still administered using antiquated technology systems and therefore face a bigger challenge in supplying data. Ensuring this data is shared in safe manner has to be the number 1 priority for a project like this.
“Furthermore, without legislation in place compelling schemes to supply data there is a danger important sections of people’s retirement saving history would simply not be captured.
“If this were the case, it would risk undermining the legitimacy of dashboards in the eyes of users whose expectations of have been shaped by the likes of Monzo and Deliveroo.”
Measured approach
“Given how valuable and fragile trust in pensions is at the moment, it is sensible to take a measured approach to dashboards introduction. This should also allow breathing space for proper consumer testing to determine the best ways to engage savers with information about their retirement pots.
“More broadly, the creation of dashboards should kick start a wider debate about pensions disclosure requirements and the case for simplification.
“We need to move to a world where disclosure is aimed at providing useful information to help people make retirement decisions, rather than ticking a regulatory box as has too often been the case in the past.
“The two-page document set out by the DWP for workplace schemes feels like a good place to start, and it is important the principles of simplified disclosure are mapped across all types of pension schemes.”
