Long-awaited online pension service could be ‘killed off’.
The long-awaited pensions dashboard could be scrapped, it is reported.
The Times reports that welfare secretary Esther McVey may ditch the online service the government promised to introduce more than two years ago.
The pension dashboard is being created to help workers track their pensions savings and to help protect them from fraud.
It was announced by former chancellor George Osborne and has been widely welcomed by the pensions industry and consumer pensions commentators.
The Times reports that McVey ‘has moved to kill off the service’, on which the government has made no further progress since a consultation finished in March.
Nathan Long, senior pension analyst at Hargreaves Lansdown, says: ‘The Department for Work and Pensions was expected to publish its feasibility report in March or April and that has now been put back to spring or summer. The delay is probably not a very good sign.
Issues around the dashboard have centred on whether a government body should develop it or allow the industry to create its own.
Another factor is whether it will be compulsory for pension schemes to provide data for the service, which could be difficult for older schemes, particularly those which are run on paper with no computer access. Long adds: ‘The dashboard was supposed to be brought in in 2019 but I cannot see that happening.’
Kate Smith, head of pensions at Aegon, says: ‘The pension industry stands ready to go ahead with the dashboard, and constant delays and procrastination have been unhelpful in the extreme.’
Commentators say that with auto-enrolment now in full swing and more people saving for retirement than ever before, the introduction of the pension dashboard service is crucial. Recent research has found that more than one in five savers has lost track of a pension pot, because they have lost the paperwork, failed to tell their scheme when they have changed address or just forgotten about it.
The Department for Work and Pensions estimates some 50 million pension pots will be lost by 2050 without an official online service to help workers keep track of them.
Smith adds: ‘Ditching the dashboard at this point makes very little sense and will, ultimately, make people’s retirement planning harder. Having a single source of pensions data that tells people what they can expect from both the state and their private pensions should significantly boost people’s engagement and lead to better decision making.’
Andy Tarrant, head of policy at The People’s Pension, says: ‘At a time when 14 million are at risk of not having enough to live on when they retire, it is astonishing that an initiative aimed at helping millions of people could be seen as a ‘distraction’ by government. It should be doing everything possible to help people plan ahead.’
More than 70 per cent of people surveyed by The People’s Pension say they would like to be able to see all of their pensions in one place, which is what the dashboard would allow.
Plans to scrap the service have not been confirmed or denied. The DWP told the Times: ‘When we have an announcement to make we will make it.’
Elliott Silk, head of commercial at Sanlam UK, says: ‘It crucial we continue with the launch of the pensions dashboard particularly as people change jobs, which they do ever-more frequently in today’s world. Even if an employee maintains details of their existing pensions, they can be difficult to track due to consolidation within the pensions industry.’