Govt urged to avoid ‘dumb’ dashboards

The Department for Work and Pensions’ (DWP) current proposals in its consultation could risk creating ‘dumb’ pensions dashboards of limited initial use to consumers, LCP has warned.

The consultancy said that as, under current plans, all dashboard providers will be required to present member data in a standardised way with restrictions on ‘manipulating’ the basic data or presenting it in a different way, ‘added value’ services could be inhibited.

Restriction on services such as modelling the impact on retirement income of extra contributions or working for longer could lead to dashboards being of limited use to individuals, who may feel the need to go elsewhere to use the information provided, LCP noted.

The DWP’s consultation stated that the government hopes the restriction of the way view data can be presented and manipulated on dashboards will help build trust and confidence in the information shown.

“However, [qualifying dashboards] are not prevented from offering people the ability to export their data away from the dashboard, either to another page within the [dashboard] provider’s system, or beyond,” the consultation added.

LCP warned that this “extremely cautious” approach could lead to users taking their data to somewhere less regulated, where the risk of scams or poor decisions could be increased.

It called for ‘fully interactive’ dashboards to support users in thinking through their options, rather than the more restrictive model.

“The desire to protect consumers is understandable, but if this results in ‘dumb dashboards’ then this could do more harm than good,” commented LCP partner and former Pensions Minister, Steve Webb.

“Simply seeing all your pensions in one place is the start of a journey not the end. If dashboards themselves are severely restricted in the support and services they can offer, consumers will simply take their data elsewhere, almost certainly to a less regulated environment.

“The best antidote to scammers and poor choices is to provide more help and guidance within the dashboard environment, rather than to drive people off.”

LCP also warned of the risk of a ‘dash for cash’ under current proposals, noting that pension businesses may seek to use dashboards to harvest dormant pension assets on the basis of heavy marketing and investment in technology, potentially at the expense of low costs and/or good investment returns.

It raised concerns that if dashboards are launched for all on one day, this could lead to IT problems, and pension schemes and sponsors being “swamped” with queries and requests for transfers.

Finally, LCP noted that the Integrated Service Providers (ISP) market “barely exists” at present, leaving pension schemes will little to choose from. The consultancy called for urgency in developing this market.

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