It is not a ‘slam dunk’ that pensions dashboards will result in members consolidating multiple pension pots, Ignition House managing director, Jeanette Weir, has warned.

In response to an audience question at the Pensions UK Investment Conference, Weir stated that “the jury’s out on what impacts dashboards will deliver”.

“On the one hand, being just being able to see everything in one place takes away that ‘am I going to lose it’ fear?," she said.

"But on the other hand, you will see all this plethora of pensions that you've got. And I would imagine that when private sector dashboards come along and you can compare different performance costs and charges, people will start to think about moving from lower performing wants to better pensions in the run up to retirement.

"But I think it's a bit of a mixed message at the moment. I'm not it's not a slam dunk that dashboards are going to lead to consolidation."

If dashboards do result in increased consolidation and members transferring across to different providers, fellow panellist, TPT Retirement Solutions investment director, Peter Smith, questioned whether it may result in ‘liquidity events’ similar to that in defined benefit (DB) pensions in recent years – where enhanced transfer values saw a number of members move out of their DB scheme into a defined contribution (DC) one.

“All of a sudden, what we thought was a very long-term investment strategy, making decisions for decades to come, actually became a very short-term liquidity issue, so it is something to think about in terms of how we engage with members,” he added.

While discussing member behaviour in the context of creating default pathways, Smith warned that “the key lesson I took from what we've done over the past few years is we can't really use what's happened over the previous decade as an indication of how you should drive the product for the next decade”.

“Consumer behaviour is fundamentally changing in DC”, he added.

However, Weir “disagreed slightly” over the extent in which member behaviour has changed.

Over the past 10 years of researching this, she has found the tax-free lump sum remains important to people, and “they're doing the same things now with that money, and for the same reasons, as years ago”.

“They're taking it out, they're buying a car, they're paying off their debts. They're investing in an extension for their house. They're buying their caravans so they can take their families on holiday. It's sort of burning a hole in the pockets, exactly the same today as it was back then. But the difference is that the [pensions] landscape is shifting slightly,” she explained.

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