Plans to develop a dashboard that gives customers a digital statement of all their pension savings are a “decade or more away” because some firms are drastically lagging behind the industry, says pensions minister Ros Altmann.
The FCA has called on the industry to develop a “Dutch-style” dashboard but progress has been slow, leading to calls for the Government to guide the industry and potentially provide funding.
But Altmann, speaking to Money Marketing, rules out Department for Work and Pensions intervention.
She says: “I can’t see the justification for the Government to pay for the dashboard. It should be industry-led but obviously we have to provide the state pension input and we can do that electronically.
“It could be industry-wide or individual companies. It’s best if everyone in the industry feeds into a central platform but we’re a hell of a long way from that.
“At some firms their old policies are still not online, you don’t have a hope in those cases. We have to recognise that for the foreseeable future – the next ten or even more years – you won’t be able to capture every single pension policy.
“However, with the increased number of large, pooled funds the job of an aggregator service will be much easier because there are less cats to herd.”
She adds: “Once we have a framework we can look at whether any other action is needed. My fear is the industry itself has not decided how it wants this to work. As long as you have different views even among the big players – and that’s where we are now – there’s nothing for the smaller ones to be asked to join.
“Freedom and choice and auto-enrolment has only just started – by 2017 we will have a much better idea. I know everybody wants this done tomorrow and so do I but realistically we don’t know how the new pensions landscape will develop, let alone how we can bring the old landscape into it.
“I am in favour of standardised forms. At the moment regulations require firms to send a wake-up pack and it would be very helpful to have a standard form that summarises what’s in packs across the industry.”
The pensions minister also hits out at Professor Dave Blake’s long-awaited report into the retirement freedoms that is expected to provide the backbone to Labour’s pensions policy.
It suggests reversing some of the pension reforms, including adding extra protection for non-advised customers and creating so-called “safe harbour products.
Altmann says: “I’m not a fan of over-regulation, we have often regulated too much and the new freedom and choice agenda and the new lighter regulations do make sense. The problem is, you can put in well-meaning regulation that turns out to be totally ineffective.
“We should leave it as much as we can to the industry to look after customers – we already have regulations that require providers to treat customers fairly. The trick is not to tighten up regulations, it is to make sure if people don’t behave properly they are punished.”
Altmann also backs away from Government action to help providers tackle pension fraud, despite lawyers warning a recent High Court decision left savers exposed.
She says: “We are looking at how we protect consumers, there are lots of things going on to make sure we’re on top of it but you’ll never stop fools being parted with their money, you’ll never stop people trying to part others from their money.
“I’ve looked into making it illegal to cold-call someone about a pension but I don’t believe we can do that.”
She adds: “I understand providers’ perspective but it’s clear we need to have better signposting for providers to know what’s acceptable and what is not.
“I certainly want firms to be vigilant so if they are suspicious they make some checks before sending people’s money, ideally sending people to Pension Wise. It has already stopped scams, now we have the service that is a sensible starting point for providers.”