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Tom Kean: Pensions dashboard has always been destined for disaster

The pensions dashboard: now there is a good idea, surely? Well, actually no, it is not. To be fair, it sounds like a good idea – a one stop shop where you can see all your various pensions in one place, neat and tidy, lovely and shiny.

But there are some problems – quite a few, in fact – that need to be addressed before we all waste a lot more of our precious time and money on what is quite capable of being a complete disaster.

The first one is the spanner in the works that flows to all the others: short-term political motivations get in the way of any coherent long-term planning.

Pensions dashboard petition surpasses 14,000 supporters

The constant layering of ever-more bewildering rules have rendered the perfectly laudable initiative a non-starter. Pensions are now so complex, the average consumer has absolutely no chance of being able to interpret dashboard results with any confidence. Just imagine they relied on the information. Think of all the ways they could go wrong.

Then there is the cost. Imagine starting a hugely complex IT project like this across multiple stakeholders without agreeing precisely who is going to pay for what.

And forgive me if I have missed something but who exactly wanted this in the first place?

In all my years of advising clients, I have never been asked if there was such a service, our own cash flow modelling aside. If you ask someone whether they would like such a thing, what else are they going to say? Of course they want some kind of magic bullet for their finances.

Tom Kean: Back to the future on pension transfers

And, indeed, why just pensions? Why not Isas and bonds and all the other investment and savings vehicles equally deserving of special attention like this?

But that is the point. It takes years of experience and qualifications, and lots of time to put together any kind of amalgamated interpretation of a client’s assets. It is simply not possible to do it like this with our current range of pensions.

This dovetails quite nicely for a bonus point that illustrates my scepticism: the sheer folly of the proposed collective defined contribution schemes currently being run up the flag pole.

Again, after 30 years, I totally get where people are coming from, and I am completely aligned to the possible benefits. But, surely, every fibre of your being must recognise the extra layer of confusion this will bring to the table. It is just not helpful.

No matter how splendid you think a new and improved pension scheme might be (and I am sure some are), we have had personal pensions since the late 1980s and they work. They are intuitive and easy to understand in theory. They are fundamentally fair and, despite steady headwinds, strangely popular. They come in lots of different flavours and can be used for lots of different things. We have already got what we need; we just need to carry on and make it work.

Tom Kean is director of Thameside Financial Planning

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Christopher Pitt 15th August 2018 at 3:11 pm

    What a depressing little article. We would still be living in caves if we all followed the “its too hard” attitude displayed here.

  2. “In all my years of advising clients, I have never been asked if there was such a service, our own cash flow modelling aside. ”

    Tom – you clearly never advised me. In all my time being advised by IFAs I lost count of the time I asked for a clear view of my pension.

    Now I no longer use IFAs, I built my own dashboard, and a 15,000 stron 38 Degrees petition says your throwaway statement is flat wrong.

  3. Richard Howells 15th August 2018 at 4:09 pm

    An open data environment is here. Whether it’s a pension dashboard or an asset dashboard isn’t the issue. For millions of consumers understanding where they are is a critical step for them to take ownership of their long term financial future. For some their adviser will lead them through this, for others technology must play a part and is in other industries. Let’s not kill an initiative because it has some questions to work through.

    • Indeed but in an open environment don’t you want a market in those offering guidance based on the data for those who know where there assets are and an asset tracing service for those that don’t?

  4. Beautifully written piece – couldn’t agree less!

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