The UK government risks exposing millions to fraud and lost pension pots if it abandons its support of a pension dashboard, according to the Association of British Insurers (ABI).
The trade body issued the stark warning after a UK newspaper this morning reported that Esther McVey, the UK’s state secretary for work and pensions, was considering abandoning her department’s work on the pension dashboard in favour of other welfare reforms.
The newspaper cited anonymous sources who said McVey believed the dashboard should not be provided by the state.
If true, it would directly contradict statements from Guy Opperman, the minister for pensions and financial inclusion. In October last year, Opperman told the Pensions and Lifetime Savings Association’s (PLSA) annual conference to “be in absolutely no doubt: the dashboard will happen”.
Other politicians have also supported the dashboard concept. The Work and Pensions Select Committee, a cross-party group of MPs, even called for the project to be taken out of private sector hands altogether and be run solely by the government.
The ABI and technology firm Origo have been working on prototypes for a dashboard – which would bring together in one place an individual’s personal, workplace and state pensions – for two years. Last month, Origo announced it had successfully tested a version of the dashboard for use by up to 15m people.
Huw Evans, director general of the ABI, said: “It is vital the government stands by its promises on the pension dashboard. To abandon it would be a huge let down to millions of savers, leaving them unable to find the money they have saved and even exposing them to fraud.
“This is an initiative with cross-party support, backed by consumer groups, which is a win-win for everyone. The pensions industry is committed to helping but we need Government involvement to ensure the system works fairly for everyone.”
There are very concerning reports this morning that Government could shelve development of the #Pensionsdashboard . To abandon it would be a huge let down to millions of savers. https://t.co/gqJ5TTUerM pic.twitter.com/7q3CHI37Tn— ABI (@BritishInsurers) July 17, 2018
James Walsh, policy lead for engagement, EU and regulation at the PLSA, echoed Evans’ sentiment, adding: “The dashboard would be crucial in helping people keep track of their money and may even encourage people to save more.
“The pensions industry is strongly behind this initiative and we fully expect the government to continue leading on the dashboard as its creation is vital in helping millions of savers have a better retirement.”
John Lawson, head of policy for retirement solutions at insurance company Aviva, argued government support was “essential”.
Government backing for dashboard is essential e.g. 1) state pension data is needed - it accounts for 40% of retirement income 2) public sector scheme data is required for a complete picture 3) all providers and schemes must be required by law to submit data, otherwise many won’t— John Lawson (@pensionslawson) July 17, 2018
Andy Tarrant, head of policy and government relations at defined contribution provider The People’s Pension, highlighted recent IT problems experienced by the work and pensions department that had hampered other nationwide projects.
According to Times, McVey considering dropping pension dashboard. Reading between lines, universal credit experience seems to have created IT aversion. The two projects are not similar and pension dashboards have been successfully rolled out in a number of countries.— Andy Tarrant (@AndDT) July 17, 2018
A spokesman for the UK’s Department for Work and Pensions referred IPE to its response to the Times’ article, which stated: “When we have an announcement to make, we will make it.”