However, despite these efforts, there are still millions of stranded pension pots, so the problem has not been completely eradicated. In a bid to combat this, the Australian government has developed an advice model aimed at helping people navigate the dashboards and build healthy retirement savings.
This progressive model, which focuses on the fundamental principle of providing good retirement outcomes for retirees, gives the UK an approach to emulate as we progress with the current consultation.
The dashboard roll out
The UK’s pension dashboard is expected to be similar to the Australian model, although pot consolidation will not be an option upon launch. Fundamentally, it will be a ‘find and display’ service that finds your pension information from secure databases and then displays it all via the dashboard. As it will be a finder service the dashboards will not store information, meaning a client or adviser will need to run a new search as required.
Users will need to share key information – such as their name, date of birth, address, and national insurance number – to confirm their identity and run these searches. In my view, this whole process could be simplified if a universal digital ID system existed in the UK as it does in many other countries, however, this is something that is being progressed by the government.
The dashboards themselves are set to be provided by the Money and Pensions Service, as well as other organisations that meet the government’s requirements and are therefore permitted to develop and host their own dashboards.
The progression of the pensions dashboards programme remains in the development phase, with Maps leading the charge to implement the new infrastructure. Voluntary onboarding of schemes is planned for 2022, with all pension schemes then staging onboarding from 2030. The DWP has defined a timeline that should see 99 per cent of all active and deferred pension memberships added to dashboards by the end of September 2024.
It is important to remember that when financials are involved security is crucial, and it is something clients will be concerned about. According to a recent ABI report conducted by Britain Thinks, consumers see security and complete data to be the core of dashboards and will expect these to be nailed.
Many fear that dashboards could provide a back door for potential fraudsters. In part, this is why the government will be ensuring restrictive access is in place, so only those that have permission to access someone’s pension will be able to attain this information.
Both advisers and Maps will be able to act as an agent and look up an individual’s dashboard if given the user’s approval to do so, but it is worth noting that only financial advisers will be able to leverage the dashboard to give counsel to clients.
