Pension schemes will be compelled to supply data to the pension dashboard in a phased rollout that will see big DC schemes enrolled first, the government has confirmed.
Publishing its response to the pension dashboard consultation today, the DWP says there will be a 3- to 4-year window for rollout, with ‘an expectation that the majority of schemes will be ready to go live’ within that period. Prototypes will be designed and tested this year, says the DWP, which adds that delegated access for advisers will be allowed.
The government says it will legislate for compulsion once a robust framework has been developed, based on its ‘design principles’ – see below.
A statement from the DWP reiterates support for the development of multiple industry-led dashboards displaying the same basic information. It also backs the inclusion of state pension data, although makes no commitment as to when this will happen other than ‘at the earliest possible opportunity’.
Industry have told government that initial models will be developed and tested from this year.
A non-commercial dashboard will be delivered and overseen by the new Single Financial Guidance Body (SFGB).
An industry delivery group will be brought together by the SFGB which will set out a clear timetable and roadmap to drive progress towards fully operational dashboards, setting standards and ensuring security to protect users and their information.
Work and Pensions Secretary Amber Rudd says: “With record numbers saving for retirement as a result of our revolutionary reforms, it’s more important than ever that people understand their pensions and prepare for financial security in later life.
“Dashboards have the potential to transform the way we all think about and plan for retirement, providing clear and simple information regarding pension savings in one place online. I’m looking forward to seeing the first industry dashboards later this year.”
SFGB chief executive John Govett says: “Our vision is everyone making the most of their money and pensions. A big part of this is equipping and empowering people to engage with their pensions, often the biggest financial investment they will make. The new pensions dashboards will play a crucial role in this, helping people make decisions about their money and pensions with confidence, so they can enjoy greater financial wellbeing throughout their lifetimes.”
ABI director of long-term savings and protection policy Yvonne Braun says: “The digital retirement revolution is here at last. All the pieces are being put in place to deliver the easy access to retirement information everybody needs and that the pensions industry is so keen to deliver.
“The ABI, leading a cross-industry group of pension providers and schemes, has already put years of work into making dashboards happen and we can’t wait to see these vital services in action. We’re delighted to see the government committing to the necessary legislation and will continue to play our part in making dashboards a reality.
PLSA director of policy and research Nigel Peaple says: “Preparing the sector for connection to pensions dashboards will be a major undertaking and one that we stand ready to support. The government is right to acknowledge that connecting the majority of schemes may take 3 or 4 years. But the government is also right to urge the pensions industry to act quickly, in 2019, to enhance the quality of their data, and to support the SFGB in developing appropriate data standards.
F&TRC director Ian McKenna says: “With so much political uncertainty at this time the minister’s confirmation that pension dashboards are to proceed is really important. It means everyone can focus on building these services regardless of the wider political environment. It should be recognised that there is cross-party support for this initiative.
“Behavioural science has demonstrated the more consumers see in their pension pots, the greater interest they take in saving. Bringing together pension values from multiple sources, in a single summary, will help individuals better understand their long-term financial future and take the steps needed to provide for it.
“It will also drive down the cost of financial advice by reducing the time taken finding details of consumers existing pensions contracts.
“Reuniting savers with £20 billion in lost pensions is a further significant benefit. In addition news that we are to have multiple dashboards means that savers will be able to choose the option they find easiest to understand and work with. This is also a valuable boost for our world leading fin tech sector as it Will be able to demonstrate exceptional capability in the UK, which can potentially be exported to other countries.”
Standard Life head of savings policy Jamie Jenkins says:“Rightly, the intent is to legislate for all schemes to provide data, albeit over a timeframe that works for all, and to include State Pensions. Both elements are crucial if we are to build a service that is comprehensive for savers.”
Smart Pension director of policy and communication Darren Philp says: “This response from the Government marks the beginning of the next phase of the pensions dashboard. But let’s not dwell for too long, because we now need to get our collective heads down and crack on if we’re to develop something that really delivers for pension savers.
“While the original ambition for delivery of a dashboard this year is not going to happen, strong progress can still be made and we need to build momentum with the Single Financial Guidance Body overseeing development and implementation. As always there is a balance to be struck between innovation and consumer protection, but we think the proposal to permit multiple dashboards is a positive step and dovetails nicely with the modern way in which people manage their finances.
“We think most modern DC schemes should be able to hook up to a dashboard quite quickly once the data standards and architecture is agreed. For others it will take more time and legislation, but we think a great first step would be for a pension finder service to cover all schemes.”
Origo chief executive Anthony Rafferty says: “There are four key elements to making the initial Pensions Dashboards a reality; governance, compulsion to provide data, state pension and digital architecture. Next steps for all of these elements have been addressed in the paper, which is good news.
“We are very pleased to see that the paper states it supports ‘the guidance and advice process through the provision of delegated access’ and suggests strong controls for consumer protection.
“We have built and scale-tested the central components and believe that the digital architecture can be deployed quickly to meet the stated timescales. The task now is for the industry to take that architecture forward to launch. It is a very exciting challenge.”
The below principles may be subject to review in future (as technology advances and the service matures):