Pensions dashboard delay

The Department for Work and Pensions has announced a revised timeline for pensions dashboard connection. 

The aim of a Pensions Dashboard is to enable individuals to see information about all their pension saving, including state pension, in one online location. This is to enable individuals to keep track of their pension savings, particularly where they have worked for several different employers. Recent research commissioned by the DWP, outlined below, highlights that access to pensions savings information was one of the barriers to member engagement with pensions.  

The connection deadline is set out in legislation and the first such deadline was originally scheduled for 31 August 2023 for large pension providers, those with 1,000 or more active and deferred members, master trust and most personal pension providers.  

Connection by providers to pensions dashboards will take place at a much earlier stage than the point at which individuals will be able to access a dashboard setting out their pensions savings. Availability of the Dashboard, known as the “Dashboard available point”, will only take place after 12 months’ notice by the Secretary of State. The matters which the Secretary of State will consider before making a decision whether the dashboard ecosystem is ready for the dashboard available point include: sufficient coverage so that most users can find all their pensions, effective operation of the dashboard service requiring rigorous testing, safety and security and user experience.      

The DWP’s written ministerial statement acknowledges the scale of the project and the complexity of the systems required to enable the dashboard architecture to operate as designed. The DWP have said that the overall framework remains fit for purpose but that regulations amending the timelines required for providers to connect to the dashboard will be laid at the earliest possible opportunity.  

On a similar note, Chris Curry, the Pensions Dashboard’s Programme Principal said:

“Delivering the central digital architecture for pensions dashboards is a complex undertaking. DWP and the Money and Pensions Service remain committed to dashboards.
Significant progress has already been made. However, we need to do more work to ensure the connection journey is stable and secure for industry, and that it’s achievable ahead of mandatory connection.” 

Additionally, the DWP recently published its report on member engagement. The DWP had commissioned qualitative research into member engagement with workplace pensions and understanding of pension charges.  

The DWP’s findings indicated that interviewees’ attitudes to pensions revealed a lot of detachment and fear as well as complacency in members’ attitudes towards pensions. The research found that these acted as very strong barriers to engagement with pensions savings. The main findings showed that whilst members trusted their employers to select an appropriate provider, this ultimately meant that they didn’t engage with pension provisions or seek additional information.

There was a lack of knowledge as to how to access information about pensions and there was also confusion around charging structures so that when participants were shown illustrations of charging structures, they couldn’t understand them. There were also barriers to consolidating deferred pots with individuals not knowing whether they could consolidate as well as being afraid of scams. Interestingly, the research found that members were more likely to engage with printed information than with email.

Helpful to the DWP’s potential solution for deferred small pots of enforced consolidation, was the finding that members were happy with either their benefits being moved to an approved government service or being consolidated into a new pension scheme. Both options were equally valued if the member was reassured about the security and the process for transferring the funds.

The DWP’s findings therefore confirmed a lack of motivation to engage with pensions but made some key suggestions as to how this could be improved.  Key suggestions on engagement included the ability to view information about their pension easily. Clearly, the introduction of pensions dashboards should assist with this particular action point.  

In the meantime, trustees and administrators should continue with any data readiness activity that they have already commenced. The Pensions Administration Standards Association has recently published guidance on data readiness for schemes preparing for or targeting buy-in and buy-out. The content is also useful and relevant to all schemes and PASA recommends that scheme trustees adopt an overall data strategy; such a strategy will be useful for projects such as dashboard readiness.