This Commons Library Briefing paper looks at the debate on the
pensions dashboard, which is being developed to enable people to
view all their lifetime pension savings (including their state
pension) in one place.
What is a pensions dashboard?
A pensions dashboard is a digital interface that enables people
to see all their lifetime pension savings in one place.
Dashboards seek to provide better access to pensions information
so that individuals can make better decisions about their
retirement plans.
Why do we need pensions dahsboards?
Recent labour market and pension reforms have made the need to
improve access to information more pressing. Pensions have become
more complex and individuals have taken on greater
responsibilities for saving and investing for their retirement
years.
In 2016 the Financial Conduct Authority (FCA) said a dashboard
was needed. It said the data for this should ideally be retrieved
directly from providers, be updated in real time and contain
projections of pension income based on different scenarios.
A Pensions Dashboard
Prototype Project later showed that it would be possible
to build such a dashboard in the UK.
Development of dashboards
In Budget 2016 the
Government said it would ensure industry designed, funded and
launched a pensions dashboard by 2019. This deadline was not met.
DWP published the findings of a feasibility
study on 3 December 2018 and launched a consultation. In
April 2019, the Government’s response to this confirmed that:
- Industry would design and develop its own dashboards. The
Single Financial Guidance Body – now the Money and Pensions
Service – would convene a delivery group to help ensure
that this happened safely and securely.
- Multiple dashboards would improve consumer choice but should
exist alongside a non-commercial dashboard hosted by the SFGB
offering an impartial service to those who prefer it, or who may
not be targeted by the market.
- The Government would legislate to require pension schemes to
provide individuals data (with their consent) via pensions
dashboards. This would follow the creation of “a robust delivery
model with the appropriate governance.”
- There might be merit in exempting some schemes from
compulsory participation, such as Small Self-Administered Schemes
(SSAS) and Executive Pension Plans (EPP).
- The Government would work with the industry delivery group to
integrate the State Pension into pensions dashboards.
Funding and costs of the dashboards project
In the Autumn Budget 2018,
the Government committed funding for 2019/20 to “help fulfil its
role in facilitating industry to make dashboards a reality”.
However, it said that in the longer term the costs should be met
by the pensions industry, possibly through existing industry
levies. The Government’s Pensions dashboard impact
assessment estimates ongoing costs to industry of up to
£1.48bn.
Next steps
On 7 January 2020, the Government introduced the Pensions Scheme [HL]
Bill 2019-21. Part 4 of the
Bill contains provisions, which provide a framework
to support pension dashboards. Clauses 118 and
119 would amend the Pensions Act
2004 by inserting new sections in Part 4 (financial
planning for retirement) of that Act.
The MaPS Industry Delivery Group (now called the Pensions
Dashboard Programme) began operating in autumn 2019. It published
a programme update in April 2020, in which it set out some of the
challenges and said it hoped to provide a clearer timetable for
delivery before the end of 2020.
