Countdown to Consumer Pensions Dashboard
A fundamental of financial planning is the streamlining the information relating to our clients’ personal finances.
For most people, planning ahead for retirement and making decisions relating to pensions form an essential part of this process. It can also be the trickiest part of the financial plan to navigate.
This is because to plan ahead, savers need to calculate what income they will need and what they will receive from the various pension pots they may have accumulated over the years. These can include workplace or personal plans, as well as the State Pension. It is not unheard of for an individual to have as many as 12 employer-related schemes.
In the March Budget, the Treasury announced it would be working with the financial services sector to launch a new consumer-facing dashboard. It is very positive that the Treasury has now confirmed the date for completion of the prototype.
Overseen by the ABI, 11 of the largest pension providers are collaborating to build a working model by March 2017. The finalised Pensions Dashboard is earmarked to be available to consumers in 2019.
It is an ambitious timeframe but the emphasis both Government and our sector are giving this project is a clear indication of its importance to consumers and their advisers.
The technology will enable savers to review what they actually possess in the way of pensions and to view the performance of each of their different schemes in a single place. They will also be able to access online tools which will help them understand how much they will need to save to provide for a good future as well as track lost pension accounts.
All this helps to fast-track the “onboarding” process which takes place when an individual starts working with a financial planner. By unlocking swathes of information, efficiency in the pensions process will be vastly improved. Of course, this will speed up the information-gathering process and greatly benefit the client-planner working relationship.
As with banking apps, accessing pension data will become a standard routine. The big picture is that easy access to organised pension information will become the norm and, in turn, will encourage consumer engagement with pensions per se. Many people still think of pensions as opaque and complex and this is a huge psychological barrier which can prevent someone taking out a pension in the first place.
The Government has yet to decide whether to introduce legislation or regulation to ensure all pension providers embrace the Pensions Dashboard.
This latest initiative is an exciting and progressive step for pensions. There is a duty upon our sector to do what it can to help people save for retirement. Compulsion on the part of the providers must surely be the way forwards.