Pensions Dashboard: a golden opportunity to connect people with their pensions?

The pensions dashboard will let people see all their pension savings and entitlements in one place. People will be able to keep track of auto-enrolled savings as they move jobs, as well as personal pensions and the state pension. This will help people plan better for the retirement they want. But only if it is done in the right way.

The Pensions Dashboard project team has argued that for the dashboard to work for people it must be comprehensive, effectively regulated and underpinned by strong independent governance to ensure pension savers are given the same information wherever they look[1]. We agree.

But it needs to be more than this. Looking at how well people are doing from pension freedoms, the FCA found that people didn’t trust pensions or the industry[2]. This meant they were disengaged, reluctant to take advice, and took decisions about their pension savings that probably weren’t in their best long term interests. In research for the dashboard project, consumers said they wanted and expected the dashboard to be government led. So we welcome the government’s recent commitment to leading the next phase of development.

However, the government seems to favour a model where any pension provider can produce a dashboard for its customers. This sounds fine in theory, so long as all providers are compelled to take part (far from a done deal), and the information is standard. But it ignores the all-important question of trust. As the Minister for Pensions said recently, the aim of the dashboard should be to maximise people’s engagement in pensions while maintaining their trust.

This won’t happen if the dashboard is only provided by the industry. There is a fine line between providing information and pushing products. Consumers know where that line is, and they dislike being ‘sold to’. A dashboard with heavy branding or irritating pop-up ads would rapidly put people off using it.

It is vital, then, that people can have access to a dashboard that is impartial and sales-free. We think the new Single Financial Guidance Body is the obvious place for this. Subject to parliamentary approval, the SFGB should be up and running in a year’s time. It will be the home for all pensions guidance, including Pension Wise. People rate highly the pensions guidance they get from government sources. They also trust it.

The dashboard is a great opportunity to get people interested in their pension savings. It should not be wasted by commercial interests driving out a solution that people will trust and use.

[1] Pensions Dashboard Project: Reconnecting people with their pensions. 12 October 2017

[2] https://www.fca.org.uk/publication/market-studies/retirement-outcomes-review-interim-report.pdf