Fiona Tait, Technical Director, Intelligent Pensions
Recently, I was fortunate to be asked to join one of the panels taking part in Bravura Solutions’ Pensions Dashboard week, and naturally much of the focus was on when, or even if, we are ever likely to see it up and running. In my view, and that of my esteemed fellow panelists (one of whom provided the stolen strapline above) was that it will happen, and when it does the impact on the pensions landscape will be so fundamental that it will also seem like they have always been here.
When will it happen?
The pensions dashboard was originally mooted in 2015, with delivery targetted for 2019:
“HMT should challenge the industry to make a pensions dashboard
available to consumers by 2019, bringing together industry and consumer
representatives to help them set direction and drive progress.”
HMT and FCA, 2016
Those in the industry might therefore be forgiven for a certain amount of skepticism regarding the timescales, but the fact is that progress has been made. Unfortunately, like many other good ideas, it has proved much more difficult to deliver than was expected.
The project timetable still refers to voluntary onboarding from this year and a staged rollout starting in 2023. This still seems like a pretty tall order, but I remain confident that in, say, 10 years’ time the dashboard will be a permanent fixture and people will have forgotten how hard it was to get information without it.
The good news is that while pensions geeks may be experiencing exasperation the end user, ‘Joe public’, is pretty much unaware of it. Unlike the trams there is no obvious hole in the ground and for them it will be delivered if not fully formed, at least in good working order.
Staged roll out
The project is designed to be rolled out on a staged basis, primarily on the basis that while some providers and workplace pension schemes are already in a position to provide the data required, others are not. Included in the latter group are the bulk of both public and private sector defined benefits schemes, and older occupational and individual pension arrangements.
Research in Sweden ahead of the launch of their own dashboard strongly supported the importance of breadth of coverage, rather than depth of information. It would seem likely therefore that while the initial roll-out will be staged, it won’t happen until the majority of schemes are able to provide at least basic information. Compliance will be enforced by regulation, mirroring the process that worked so well for automatic enrolment (AE).
Another advantage of the staged roll out is that it will control the numbers of people accessing the system for the first time. The likelihood is that having seen what their funds are worth, people will have questions about what they should do next. Schemes must be prepared not just to provide the initial information but also to handle the volume of queries which result.
Adding value
In contrast to AE however, once the dashboard is up and running it should be possible to build in additional value services without having to wait for additional legislation. Planning tools will become the norm and should go a long way toward plugging the increasing ‘advice gap’.
With information on pension schemes taking weeks and even months to unearth, many advisers currently add value by collating this information before they can deliver any advice. The dashboard should make this unnecessary and could go further with the addition of shortfall calculators, cashflow and ‘what if’ projections. People should be able to find out what they currently have, obtain an idea of what their future pension will look like and identify the actions they can take to get the retirement they want.
Ultimately if users are able do more for themselves, particularly during the accumulation phase, advisers can then concentrate on the more difficult aspects of financial planning which is after all what we took our exams for.
|
