The DWP’s consultation on regulations to introduce Pensions Dashboards in the UK closes on Sunday 13 March
Dashboards development is important as research suggests there could be 27 million ‘deferred’ retirement pots by 2035
Government must ensure all potential scams risks are considered and, where possible, mitigated ahead of the launch of the first Dashboards in 2023
Savers also need help interpreting their pension information – but the first versions of Dashboards are unlikely to offer this help
Tom Selby (pictured), head of retirement policy at AJ Bell, comments:
“People now expect to be able to access their finances at the touch of a button via their mobile phone. As such, the Government is playing catch-up with people’s expectations in introducing legislation to facilitate Pensions Dashboards.
“However, late is most certainly better than never and Pensions Dashboards undoubtedly have the potential to help millions of people not just locate their retirement pots but engage with them as well.
“This will become even more important as the combination of an increasingly transient workforce and automatic enrolment will inevitably see more savers with retirement pots scattered far and wide. Indeed, independent research suggests the number of ‘deferred’ pensions could surge to 27 million by 2035.
“First and foremost, people need help locating these lost pensions. They need to be confident the information they see is accurate and, crucially, any potential gaps need to be clearly explained.
“As Dashboards develop from these early versions a competitive market will hopefully flourish, with different tools made available so savers are better equipped to turn information about their pensions into affirmative action.”
Reducing the opportunities to scam
“Introducing more digital ways to access information will, unfortunately, always lead to an increased risk of scams. This isn’t a reason to not go ahead with the development.
“However, as scammers will continue to innovate to defraud people, Government and the Money and Pensions Service (MaPS) need to be vigilant, and consistently and continually strive to close down scams.
“Identity services will be key to ensuring savers using Dashboards are protected and should take on responsibility for checking the right people receive the right information about their retirement pots.
“Thorough validation of a person’s identity is critical to make sure it is the customer who is trying to gain information and not a scammer. The stakes could not be higher on this – if Dashboards lead to people’s pensions being compromised then the loss of trust in the service would likely be fatal.”
Turning the information into action
“Savers will need help in interpreting what the data shown on Dashboards means for them and their plans for a better financial life.
“This could be supported within Dashboards through models and tools designed to help people make decisions about saving and drawing an income in retirement. For Dashboards to reach their full potential over time is vital they are not only able to show details of pensions but help people understand what that information means for them as well.”