The government has stepped back from the pensions dashboard but the new single financial guidance body is the ideal candidate to take the baton.
In a previous article, I questioned whether a pensions dashboard was likely to drive the high levels of individual engagement envisaged by its most ardent of supporters.
The dashboard itself, which is defined as a one-stop shop where savers can see all their pensions, is now in doubt. Just the other week the government announced its support for a private sector-led dashboard model.
Experienced Westminster watchers, however, detected a distinct lack of enthusiasm for the project on the part of the secretary of state for work and pensions. Long gone are the salad days of last autumn when full-throated support for the dashboard project was voiced by the pensions minister. Uncertainty reigns. The question is why?
One issue is what we rather grandly might call taxonomy. “Dashboard” enjoys such widespread support partly because it means different things to different people.
So those who favour multiple dashboards, built and operated by pension providers using open standards, and enabling “one click” pension consolidation purchasing decisions stand alongside non-commercial entities favouring a single public authority dashboard which simply shows your pension entitlements online.
Inevitably, as dashboard moves from proof of concept to delivery, this coalition begins to fray. Subtlety doesn’t survive contact, as they say – contact in this case being the serious engagement of Department for Work and Pensions civil servants with the practical realities of delivering a dashboard(s). Which brings me to the fundamental reason for the government’s caution. Namely, governance in the public interest.
Pension scams are foremost in policymakers’ minds, and rightly so since retirements and lives are being ruined.
Data privacy and protection is emerging as a global issue in the wake of the rise of tech giants, and releasing hundreds of millions of pensions records into a non-sterile environment represents a risk. This is even before one considers consumer detriment.
The financial services industry does not have a spotless record and a private sector multiple dashboards “click and consolidate” model is nothing if not a great selling opportunity.
For example, every provider would have to use the same assumptions in the algorithms underpinning retirement projections or product comparisons would be moot.
It’s not hard to imagine the permanent secretary advising the secretary of state to proceed cautiously.
The risks of signing off on a dashboard look heavy when compared to the reward.
This is why we are calling for the governance of the dashboard to be handed to the new single financial guidance body.
The secretary of state could hand the governance of the project off in confidence. The private sector would have a partner in bringing a one-stop shop dashboard to fruition. And savers could finally see their pension entitlement on a single screen.
Gregg McClymont is director of policy and external affairs B&CE