UK savers will be left in the dark over their retirement finances unless the government delivers the ‘pensions dashboard’ promised as part of its reforms, the former pensions minister Steve Webb has said.
Mr Webb, now policy director at Royal London, warned in March that the government’s new Lifetime Isa is “a rival product which risks causing mass confusion”.
Now he is fronting a research report aimed at highlighting how several other countries are far ahead of the UK in making the dashboard concept, where all an individual’s pension rights can be viewed in one place, a reality.
Royal London, the UK’s biggest mutual insurer which runs its pensions and protection business out of Edinburgh, has published the report to coincide with a London conference today. It says savers in Sweden, the Netherlands and Australia can already access a pensions dashboard but “despite years of discussion, the UK is currently only planning to have one in place by 2019, and even then it is not clear that the dashboard will cover all of the many different types of pensions which an individual might hold”.
The report says most people build up multiple pension rights over their working life, from a combination of state, workplace and personal pensions. “With the advent of automatic enrolment into workplace pensions, millions of new small pension pots will be created as individuals move from job to job and potentially build up a separate pension pot in each employment. A Pensions Dashboard would allow individuals to see their pensions in one place and could link consumers with lost pension pots from previous employments. It could also prompt people to seek advice as to whether their pension savings are in the best place.”
It says various government departments and industry groups have been involved in pilot projects, but so far there has been “little co-ordination or clear governance of the project”. Royal London is calling on the government to play its part by making sure that state pension information is shown on the Pensions Dashboard, and also to be “more proactive in pulling together the many interested parties whilst making sure that the needs of consumers are put first”.
Mr Webb commented: “It is unacceptable that the UK is in the ‘slow lane’ and our savers are being left behind. Getting the many different parties involved to work together in the interests of the consumer is a big job and may even require legislation. Government has been too ‘hands-off’ to date and needs to drive this project forward, otherwise savers will continue to have far too little information about their overall pension position.”
The Money Advice Service, now being wound up, has said it is co-ordinating the project with government and industry, and aims to report in the summer.
Frank Field MP, chairman of the Westminster work and pensions committee, welcomed the commitment in the Budget to a one-stop platform, “which we and others have been calling for”.
Aviva’s retirement director Clive Bolton says: “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.”
He says that “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”.
Michael Johnson, campaigner and researcher at the Centre for Policy Studies think tank, has questioned whether the pensions industry is capable of a not-for-profit solution because of “competing commercial agendas”.
But the Association of British Insurers says it has long advocated a pensions dashboard and “we do not agree that industry participants have little interest in making this happen”.
David Smith, financial planner at Tilney Bestinvest which has 125 staff in Scotland, say he is “unconvinced that the dashboard will ever come to light”.
Mr Smith added: “There are simply too many outdated legacy systems still being operated by insurance companies and pension administrators alike.”
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