Pensions dashboards have been a long time in the making, but the Department for Work and Pensions is now driving this project through to fruition.
Over recent months there has been significant steps forward. The official timetable has been set and large occupational schemes and all types of personal pensions have to connect by next summer.
A year of testing follows that and once more than 90 per cent of schemes are connected, dashboards will be launched onto an unsuspecting public.
Well, I say unsuspecting, but only for a short time. Because this cannot be a soft, just-mention-it-in-passing, launch. After the huge resource spend by both government and industry, we need people to use the dashboards. And to do that the government needs to tell them they exist, undoubtedly through a high-profile media campaign.
Pensions dashboards may be a big government project, but they will have implications for financial advisers’ and planners’ businesses.
So here are three reasons to get excited about pensions dashboards.
1. They will increase pension chatter
The UK public have a love/hate relationship with pensions. Many people moan about them, but most of us want to know more about how they work and how much their own is worth.
Pensions dashboards need to come in with a bang not a whimper, and push people to use them. This is going to thrust pensions and retirement savings into the spotlight, even if only for a short while.
2. They will ease your workload
Gone are the days of clients bearing shoeboxes of past paperwork. Pensions dashboards will show them the value of each of their (not yet accessed) pensions, including public sector schemes and the state pension. This will include both a projected fund value and an estimated retirement income.
This should lighten the load for you and your business in compiling the data.
However, I cannot promise the view data will always be complete. There will still be some partial matches to investigate, where the scheme might have reason to believe the user is a member but cannot fully match the record.
Users will be able to give access to their data to either a Money and Pensions Service guidance specialist or a financial adviser.
3. They may offer your business a new opportunity
Different firms can host a version of the pensions dashboards. All have to show the same information, and the text and design they show the user will be carefully controlled. But the idea is that the user can stumble across a dashboard in many different places.
The Financial Conduct Authority is currently consulting on how this could work in practice. The pensions dashboards give a static view of a person’s pension wealth. That does not help the user answer the question of what to do next.
