Wisdom or stupidity of the crowd?
I don’t get the passion for the pensions dashboard project - the FT is reporting this morning that “About 10 million people in the UK stand to retire with ￡15,000 less” if the government scraps the pension dashboard project.
Now, I like the idea that people can see all their financial information in one place and as I have said before, I pay @moneyhub ￡15 per year for just that service (other finance apps are available).
So what is it that has got all these people so angry - what problem is the dashboard going to solve? The petition is based on some fairly bizarre statistics e.g. there will be 50 million lost pots by 2050. I haven’t actually seen the assumptions that get to that figure - I couldn’t find the report and when I asked DWP for it I got no response.
I guess on one measure it might be a reasonable estimate i.e. some millions of people won’t know where all their savings are. But that is different from being completely lost. I did a FOI a while back about pension records without a national insurance number on them and it was less than 0.5% of all the records submitted to HMRC (15 million). That means that it is highly likely that those lost pots can be traced to their owners by one of the many tracing services available.
I can make a pretty compelling case that just leaving your pension alone until you retire is a good strategy so people being unaware until then is not necessarily a bad thing…
Then there is the campaign claim that government promised to do this which I don’t think they ever did. My recollection of George Osbourne’s announcement was that Government challenged the industry to deliver a dashboard. So far, the industry has done a proof of concept and decided it is too hard…
There are lots of things that government can do to make pensions better e.g.
- Sort out the net pay/relief at source lottery than means lots of low earners miss out on tax relief
- Align pension and benefits policy so that pensions are always beneficial (currently they are not for lots of people on benefits)
- Increase/decrease the state pension age depending on your view
- Enhance/remove the triple lock - again view dependant
- Remove the AE earnings threshold
- Extend AE to self-employed
The dashboard just doesn’t appear to have a compelling use case and even if you persuade me of that, government seems just about the least likely organisation to be able to deliver a usable site - although more likely than the pensions industry it seems.
Policy Manager, Workplace Benefits at Aviva
6 年A dashboard will only enable better planning if we have compulsion and the inclusion of all pension schemes. A dashboard that shows some of what you have isn't a whole lot of use. So regardless of who delivers it, government support is essential. As for the original article, the assumption from the people hosting the save the dashboard petition, seems to be that everyone in the UK will forget about every pension they have, other than the one they have with their current employer, unless we have a dashboard. Great headline, hugely flawed assumption.
Senior Manager at Deloitte
6 年I share your frustrations with the data source but I am also firmly behind the dashboard as one of the steps that will support pension engagement and education. When people can see the funds they have accumulated, they will be more engaged (additionally, behavioural science suggests, counter-intuitively, that the more people can see they have saved, the more they will go on to save... Given your article I should probably find the source for that though it may take me a couple of days, pretty sure it related to studies on US 401k schemes) Consider how hard to is currently for a financial advisor or professional executor to locate an individual's pensions. What chance does a lay person have? Granted there are other factors as well but it no wonder people are currently switched off. A beta release of multiple dashboards is probably inevitable but technology improvements will mean a single dashboard is achievable
Retired
6 年Having just spent 4 hours changing my address with 4 different pension administrators, and one of them taking 1.5 hours of my time to ATTEMPT to sort 2 plans (passed through 4 different telephone numbers, and neither could be updated) it's little wonder most people disengage with tracking their pension. 4 out of 6 policies completed, the other 2 couldn't be traced!!!
Retired@Jobdone
6 年To add to Bob Champion's comments the dashboard has the potential to accelerate mortgage offers for those looking for mortgages in Later Life. Making it easier for Brokers to ascertain with great certainity pension income of clients and for lenders to verify income in retirement meaning offers can be issued in minutes rather than weeks or months. This market will grow beyond anyone's expectations in the next 10 years as Honda and BMW middle Britain look to maximise all their assets in retirement. Failing to deliver the Dashboard strikes me as more than a missed opportunity. We should all get behind it and insist it is delivered.
Turning pots to pensions
6 年I follow your logic Alan- I think we are on the same page. I recently pitched to the DWP that they should ditch the idea of managing the dashboard, but do everything they can to make dashboards happen