The Association of British Insurers (ABI) has said legislation will be required to ensure the pension dashboard has wide enough coverage so it can work for everyone.
Speaking yesterday at the annual defined contribution (DC) conference run by Professional Adviser‘s sister title Professional pensions, the trade body’s director of policy, long-term savings and protection, Yvonne Braun (pictured), warned a dashboard with patchy coverage would be seen as a failure.
The public’s expectations of online services and applications in other areas of financial services are considerable, she said. This means a dashboard which tells savers what they already know will not build confidence among consumers and encourage them to use it again.
Braun said: “If you don’t get all the necessary stakeholders to participate [in the dashboard], people may end up with information they already have. So the dashboard will only ever work if it is comprehensive or near comprehensive.
“So the state pension, defined contribution (DC) pensions and even defined benefit (DB) pensions, and all those pensions in the private and public sector have to be on it.”
Government intervention is therefore required to help steer the dashboard to a successful conclusion.
“We essentially need legislation or regulation because the UK system is too fragmented for a ‘coalition of the willing’ type approach to deliver the kind of coverage required. We also know some trustees feel they want to see compulsion to actually be able to prioritise this project,” Braun added.
The biggest obstacle to rolling out the dashboard would be if the government told the industry to do the project by itself, she explained.
“This might happen as the government could say ‘there is enough commercial interest in this potentially’ and then tells the industry ‘you are on your own, just do it’.
‘Mixed economy of pension provision’
“I believe that would be a missed opportunity because such an approach might work in 20 to 30 years’ time when the system is all DC, but the problem now is that people experience this mixed economy of pension provision.”
Other questions that need to be answered before the dashboard is scheduled to launch in 2019 include: what governing body will be set up to establish data standard and sharing agreements, and what will be the security measures and commercial model.
There also need to be a balance between consumer choice and protection as sensitive personal data could be exploited by scammers, said Braun.
However, it is important to resolve such challenges as the dashboard could empower so many people.
“This is a positive and necessary policy given that large parts of the population are completely at sea in terms of knowing about how prepared they are for retirement. In 2017 this is not a ‘nice to have’ for the pensions landscape it is a ‘must have’.”
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