Not allowing a dashboard provider to record any of the data obtained will prove a massive barrier to advice processes
The pensions dashboard project has been very much a stop-start affair. It has suffered massively because of Brexit; so much so, it is hard to see how the original delivery timescale of this year will not be missed. The Department for Work and Pensions recently published its response to a consultation, but what does it all mean for advisers and their clients?
The latest proposals are broadly constructive and a couple of key issues that might have undermined advisers using dashboards have been resolved positively, but many remain outstanding. Valuable wins include a clear commitment to multiple dashboards, as opposed to a single one, and the fact that delegated access (i.e. advisers being able to access information) is now confirmed.
The commitment to compulsion, with pension providers not able to opt out, is another.
That said, the document still proposes allowing up to four years for some schemes to engage.
These schemes were asking for four years back in 2017. Have they done nothing to improve the quality of their data in the meantime?
The DWP points out such schemes already have a legal duty under the Data Protection Act and GDPR to make the initial data to be covered by dashboards available to individuals. If they are failing to do so, why has the Information Commissioner’s Office or The Pensions Regulator not already taken action?
Is the statement a warning of action to come? Advisers struggling to get the information they need from an obstructive pension scheme might want to prepare standard letters clients could use to lodge ICO complaints, quoting the DWP.
Inclusion of state pension benefits is also confirmed as a priority, but just when this key component will arrive is vague.
It is also recognised that much can be learned and reused from open banking, and that there are benefits of building a wider range of online services to give consumers a broader understanding of their financial lives. So far, so good.
Persistence of data
But there is one issue I fear may undo the whole project: a requirement that, at least for initial dashboards, there must be no persistence of data provided. Simply put, this means a dashboard provider cannot keep a record of any of the information obtained.
This could be a red herring that has not been fully thought through but it is cited as one of the main ways to satisfy certain data protection and security concerns raised by a number of parties.
If a dashboard provider cannot record any of the data obtained, this will be a massive barrier to using the information as part of any advice or guidance process.
What is more, it significantly undermines the case for building them in the first place.
That is not to say aggregation-type services will not be built, but rather a range of dashboard-like services may emerge, admittedly without state benefits, to compete.
There may be a simple answer. The DWP does acknowledge that data could be retained when needed for legal purposes.
If this were extended to cover legal and compliance purposes, the issue would be solved. However, the data security concerns of some parties might return.
This, along with the timescales, is the major concern then.
There is a real opportunity for dashboards to place the UK as a global leader in pension technology, but I fear this is about to be lost. Timescales must be more realistic.
The new Money and Pensions Service is between a rock and a hard place, having been handed a timeline any organisation would struggle to deliver on.
I cannot see how, realistically, we can be expected to get something live this year, whatever ministers might say.
I am disappointed not to see the acceptance of an interim dashboard that could still deliver key benefits.
Let’s be realistic and say we will get an initial interim solution out in the next 12 months and give the laggards 12 months after that. Allowing some to run on until 2023 should not be an option.
Ian McKenna is director of the Finance & Technology Research Centre