The UK government must legislate to force providers to contribute information to a proposed pension dashboard, industry commentators have said.
Two ministers yesterday issued statements broadly supporting the creation of a “dashboard” to collate information about individuals’ retirement savings, after weeks of speculation that the government was set to drop its support for the project.
However, the statements suggested that private companies would have to develop the model. Commentators also voiced concern that there was no promise of government legislating to provide state pension data to the dashboard, or to force providers to supply data.
Esther McVey, the minister for work and pensions, said yesterday that the dashboard concept “offers a great opportunity to give people straightforward access to their pension information in a clear a and simple format – bringing together an individual’s savings in a single place online”.
“It’s clear there is broad support for the concept of a dashboard and its potential to empower those putting money away for their futures,” she added. “By taking a leading role, and harnessing their knowledge, industry can develop a dashboard that works for pensions holders – and government will help facilitate this.”
Guy Opperman, parliamentary under-secretary for pensions and financial inclusion, said in a written statement to parliament that the government’s feasibility work on the project “has made it clear that we should not underestimate the size or complexity of the challenge”.
He added: “We will continue to engage with industry on this model and government will protect pension savers and personal information by legislating where necessary.”
The work and pensions department would report on the results of its feasibility study “shortly”, Opperman said.
Government support – but form is uncertain
The ministers’ statements marked a softening of the government’s stance on the dashboard. In October last year, Opperman told an industry conference the government would take the lead on the project, building on prototypes developed by the Association of British Insurers and technology company Origo.
“Be in absolutely no doubt: The dashboard will happen,” Opperman said at the time.
However, by July this year there had been no developments from the government and a UK newspaper reported that McVey was considering abandoning support for the dashboard.
Nigel Peaple, director of policy and research at the Pensions and Lifetime Savings Association (PLSA), which represents UK pension schemes, said it was “absolutely vital” that the government remained “closely involved” with the project.
He added: “The PLSA has long said that government participation is essential to the success of this project, both to give the public confidence in the tool and to ensure all parts of the pension sector and other key stakeholders are fully involved.”
Gregg McClymont, director of policy at The People’s Pension and a former Labour party pensions spokesman, said: “Without the government’s lead on the pensions dashboard, it cannot become the one-stop shop that people need it to be. The state pension and public pensions are unlikely to be included, and unless the dashboard is backed up by legislation, savers won’t be able to see all their pots in one place as many providers simply won’t play ball. The point of it will be lost.”
He urged the government to secure the involvement of a planned new financial guidance body to help facilitate the dashboard’s development.
Former pensions minister Sir Steve Webb, now director of policy at Royal London, described the ministers’ statements as “a huge breakthrough after a period of uncertainty”, but emphasised that “only the government” could supply state pension data and legislate to ensure full coverage.
Prototype work to continue
The ABI has pledged to continue its work on developing the dashboard, while Origo said it would meet providers later this month regarding its efforts.
Anthony Rafferty, managing director at Origo, described McVey’s comments as “a holding statement” ahead of the publication of the government’s feasibility study.
Rafferty said it had “always been envisaged” that the dashboard would be developed by the private sector and “facilitated” by government through legislation.
He added: “Origo is fully committed to getting the pensions dashboard live for consumers. We have been working with the industry in preparation for delivery of a dashboard solution since 2015. In that time Origo has led research, developed and demonstrated prototypes, steered architecture design and conducted successful scalability testing for 15m citizens.”
Bob Scott, senior partner at consultancy LCP, argued that the work of Origo and the ABI meant full support from government “isn’t necessarily essential”.
“In all likelihood, building on that prototype will enable people to view their state pension forecast alongside valuations of their pension pots from those providers who are willing participants,” he said.
However, Scott warned of “difficulties” in obtaining data from providers without sufficient digital records, and in coping with the myriad benefit structures within the UK’s defined benefit sector.