Pensions dashboards are online portals which allow individuals to see all of their lifetime pensions savings in one place. The resulting transparency of information should allow individuals to make more informed retirement decisions. The most recent proposals for a UK pensions dashboard stem from an FCA recommendation in December 2014 and were originally set out in the 2016 Budget.
Pensions dashboards have existed in some European countries since the late 1990s. Closer to home, a comparison can be made with the Open Banking reforms flowing from a Competition and Markets Authority ruling in August 2016. For more than two years, consumers have been able to access portals displaying information on all of their bank accounts in one place. Unfortunately, progress on pensions dashboards has not been as swift and there are a number of questions which still need to be answered.
Last month, the Money and Pensions Service (MaPS) published three papers providing an update on the pensions dashboards programme:
- a Progress Update Report, outlining the steps taken so far and MaPS’s priorities over the next six months with a focus on eight goals set out in the report;
- a Data Scope: Working Paper, focusing on the breadth of information which should be included on the pensions dashboards. The information should be sufficiently detailed to be useful, but also needs to be relevant to each of the many different types of pensions available (MaPS has identified 12 types, from state pensions to group personal pensions). MaPS suggests an approach whereby a small number of data items relevant to all types of pension are included on the dashboard;
- a Data Definitions: Working Paper, dealing with the specific pieces of information which should be available on the dashboards. Information must be useful for individuals, but it must not be too onerous for pensions providers to supply the requested information. MaPS proposes that the initial dashboards offer a find-and-view function with basic information (i.e. information already covered under disclosure requirements).
MaPS had been expecting to request formal responses to these papers, particularly the suggestions in the two working papers. However, COVID-19 and the resulting circumstances have put a stop to this. When things return to normal (or the new normal), we hope that this discussion can start and that steps can be taken for pensions dashboards to finally become a reality. If implemented properly, this initiative will allow pensions savings to be seen and valued in the same way as other savings, and for people to see more clearly the importance of workplace pensions within their overall employee benefits package.