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.
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.
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