Which? is calling on the Government introduce a ‘pensions dashboard’ in next week’s Budget to enable people to access key information about their pensions and savings in one place.
Providers have backed the call, but say all pension benefits – including those in occupational schemes and state pensions – should be included from day one. Scottish Widows is concerned that contract-based providers may be made to offer dashboard functionality before occupational schemes and the state pension, when this will give an incomplete picture to users. Failure to require occupational schemes to meet dashboard requirements would also increase the disparity in regulatory cost of running occupational and contract-based schemes.
Aviva says a progressive coalition of providers, government, regulators and consumer representatives could deliver a solution more quickly than waiting for legislation.
Research from Which? published today has found that nearly 47 per cent of people aged over 50 who are employed and with a personal pension are not confident about the money they had saved for their retirement. A fifth – 21 per cent – have never checked how much total savings they have, while 37 per cent say they find it difficult to keep track of their pension pots and 21 per cent say they would not know how to find out about the details of their pots.
The FCA has previously announced that it will work with the Government to develop a pensions dashboard in the longer term. But so far there has been no public commitment from the Government for the creation of a dashboard, and no timeline for its testing or implementation.
Which? executive director Richard Lloyd, says: “Deciding on a retirement income is one of the most complex financial decisions people face, but it can be difficult to find how much money you have built up over your working life.
“A pensions and savings dashboard would go a long way to providing people with a complete picture of their retirement fund and, in turn, help them make the right choices. We are calling on the Government to use the Budget to push ahead with this idea and help people to secure better retirement income.”
Scottish Widows head of industry development Peter Glancy says: “The absolute benefit to pension customers of having one easily accessible place to obtain all of the information about past and present pension plans and schemes is irrefutable.
“But this must apply to all pension schemes. The scope of what should be included in the pensions dashboard has yet to be agreed but there is growing concern that it may start off with just personal pensions. ABI research in 2012 estimated that there was £2.2trn in UK pensions system of which £250bn was in individual pensions and £250bn in group personal pensions. There is absolutely no point in just asking providers offering these schemes to be involved when they represent only 20 per cent of the assets in pensions. We need to ensure workplace schemes and state pensions are also included from day one.
“People using the dashboard as the source of truth regarding all of their pensions are easily going to lose confidence in the system if some schemes or plans are missing. To gain the greatest coverage a legislative intervention is most likely to be the push required to move this initiative along. An easily accessible, clear source of information on all retirement plans belonging to an individual would be a great opportunity to build confidence and engagement in planning for retirement.”
CII head of policy and research Laurence Baxter says: “A key finding from a major research study undertaken by the CII recently was that in the new landscape following the reforms, consumers need clear information available in an easily manageable chunks that consumers can access when and how they choose.
“We believe that a pensions dashboard, combined with improved professional standards at all levels across the pensions sector, would help to deliver these better outcomes for consumers. In our view this dashboard should be implemented and launched in partnership between the pensions sector, the Government and consumer bodies, and be promoted as such.”
Aviva UK Life managing director, retirement solutions Clive Bolton says: “Rather than wait for government to legislate, we believe that a progressive coalition of providers, government, regulators and consumer representatives could deliver a solution faster. Urgent action is needed to encourage people to take an active interest in their retirement savings as we know that people are not saving enough for retirement. We believe the introduction of a pension dashboard would be a positive step in encouraging greater consumer engagement.”
Aegon head of pensions Kate Smith says: “We’ve been a long-time supporter of a pension dashboard as we believe it has the potential to drive up people’s engagement with their pension savings, something that has long been missing.
“Having the ability for people to see all their pensions, including the State pension, in one place online could be a major step forward in helping people plan for their retirement. People will be able to see exactly what they have built up and what more they need to do to achieve the retirement income they aspire to.
“And people like the idea too, as it’ll make it easier for them to keep track of their pension pots. An Aegon consumer panel survey found that 91 per cent of customers and 81 per cent of non-customers felt they would find a pensions dashboard useful.
“Turning the pension dashboard into reality will be a massive undertaking, and to make this happen the government needs to work closely with the pension industry.”