Guest comment: Dashboard could give big shock to savers

The Association of Consulting Actuaries (ACA) supports the pension dashboard initiative as a great advance in helping individuals to ultimately see their total pension savings in one place.

There will be challenges to address – explaining that a £2,000 pension from age 65 is worth significantly more than a £5,000 DC pot will be tough – and time needs to be taken to ensure the messaging is clear.

But critically, for the first time, everyone will have line of sight of their total pension savings. But there’s potential for a big shock.

Many may realise too late that they are simply not going to be able to retire at the age they had planned, or on the income they expect.

And savings is a bigger issue to address than just pensions. I applaud our Younger Members’ Group, led by Tom Dalton, who have seized the nettle here.

The ACA’s response to the Financial Conduct Authority consultation on inter-generational fairness flagged that we need more flexible savings products that cover the breadth of savings more tax efficiently.

The ACA’s call for simplification – both of the pension tax system, but also in terms of benefit provision, continues.

Many of us are facing the challenge of GMP equalisation, but are stymied by uncertainty on the resulting tax implications.

Only when this is resolved can we tackle the joys of converting GMP, anti-franking etc into a potentially simpler pension that is clearer for members to understand and which costs materially less to administer, invest against and ultimately to insure.

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