Govt will compel schemes to provide dashboard data

The government has confirmed it is introducing legislation to compel schemes to provide data for pensions dashboards.

The legislation will be included in the Pension Schemes Bill, which was announced by HM Queen at the State Opening of Parliament today, 14 October.

In background documents published after the speech, it was revealed the new legislation will provide a framework to support pensions dashboards.

The government highlighted the merits of dashboards as its report noted that as individuals move through the labour market, they build up multiple private pension pots depending on how many jobs they have over their lifetime. The Department for Work and Pensions has estimated the average person could have 11 jobs over a lifetime.

The purpose of the bill is to support pension saving in the 21st century, putting protection of people’s pension at its heart. It also aims to create a legislative framework for the introduction of pensions dashboards to allow people to access their information from most pensions schemes in one place online for the first time.

The announcement has been welcomed by those in the industry, who have been working on the development of the dashboard for several years. The Pensions Regulator CEO Charles Counsell said pensions dashboards will be a “vital tool for savers to understand their pensions and plan for retirement”.

Aegon pensions director Steven Cameron called on other parties to support the Queen’s Speech and the bill so that pensions dashboards have cross-party support.

“The aspect of the pensions bill of greatest and most wide importance is that concerning pension dashboards. Millions of individuals have multiple pensions in which they’ve built up benefits over their working lives and pension dashboards will for the first time allow them to see all of these, online at the touch of a button. This offers a huge opportunity to help millions of individuals better engage with their retirement planning, understanding if they are on track for the retirement they aspire to, and if not, to take action accordingly,” he said.

The People’s Pension director of policy, Gregg McClymont, said that without compulstion of data for the dashboard, the project is a “pipe dream”. However, he said that there remains a package of measures necessary if the public is to have confidence in dashboard.

“First, dashboard wont work unless all savers can see all their pensions in one place. Total coverage is therefore crucial. Second, charges must be included from the outset to achieve transparency. Third, if the government continues to promote multiple dashbaords it's imperative that a legal duty to operate in the best interests of savers is placed on all such operators.”

AJ Bell senior analyst, Tom Selby, said that the fact the reforms have been given the green light from Number 10 via the pensions bill means work developing and testing dashboards can now begin in earnest.

Hargreaves Lansdown head of pensions policy, Tom McPhail, added: “Delivery of the dashboards may still be a few years away but in the end it will help with planning and cut down on lost pension pots. It won’t however give individuals the right to ask employers to pay their contributions into a pension of the employee’s choice, so there will still be the problem of increasing numbers of pension pots every time someone changes jobs.”

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