Pension dashboard should be taken out of private sector, say MPs
The UK’s proposed pension dashboard should be provided by a public sector body and not be subject to private sector competition and conflicts, politicians have argued.
The Work and Pensions Select Committee – made up of MPs from the UK’s lower house – said today that a “dashboard” to display all of an individual’s pension savings in one place would be a “vital tool” for consumers.
The government aims to introduce such a tool to the UK market next year. Work on prototypes has been led by the Association of British Insurers (ABI), with representatives from the pensions industry and support from a host of private sector groups.
However, the committee said private sector suppliers should not be tasked with hosting the service.
“The case for a publicly-hosted pensions dashboard is clear cut,” the committee said in a report published today. “Consumers want simple, impartial, and trustworthy information.
“Armed with such information, they will be more empowered to exercise choice in the decumulation product market, driving competition and consumer benefit.”
Multiple dashboards from “self-interested” providers risked adding complexity to “a problem crying out for simplicity”, the committee added.
Source: Pension Dashboard Project
It called for a single, public sector financial guidance body to provide the dashboard and for it to be funded by an industry levy.
“Competition between pension providers over the presentation of the same information risks detracting from, or even acting counter to, competition over the quality of pension products,” the committee’s report said. “Rather than regulating the dashboards into consistency, it is far simpler just to have one dashboard.”
The ABI hit back at the committee’s recommendation.
Yvonne Braun, director of policy, long-term savings and protection at the association, said excluding industry participants would be a “huge missed opportunity”.
“It is only thanks to the efforts and investment of the pensions industry that we have a prototype and are now able to talk about the practicalities of delivering a pensions dashboard for everyone to use,” Braun said.
“It may be that an initial publicly hosted service is a pragmatic place to start given the stated aim to deliver a dashboard in 2019. But it would be a huge missed opportunity if we adopt a single dashboard as the final destination.
“We know that people expect to be able to use sophisticated dashboards in the future, integrated with other services, that only the private sector will be able to provide.”