Keeping a leash on all your different pension pots could soon become a breeze thanks to the online pensions dashboard announced in this year’s Budget.
The dashboard is a platform that lets savers see all their pension pots in one place and will help them to plan for their retirement more effectively.
The government announced last month a prototype of the vaunted dashboard would be ready by March 2017 with a full launch expected in 2019.
Much has been made of the nomadic existence of the modern worker, with employees changing jobs at a frequent clip. The Treasury estimates the average British worker will work 11 different jobs in their lifetime; the ‘job for life’ a now antiquated notion.
This provides a substantial challenge to the current workplace pension: different jobs mean a different pension scheme at each employer. This number will only increase in a post-auto enrolment Britain. The dashboard aims to consolidate the average worker’s different pension pots in one neat place.
Currently, there is no way for people to see the value of all of their pensions in one place. Government research indicates over a third of people approaching retirement find it difficult to keep track of their pension pots.
The ‘job for life’ is now an antiquated notion.
Even more worrying are the “lost” pension pots saved with previous employers. The Department of Work and Pensions currently estimates that £400m worth of pension savings lay unclaimed. The dashboard will allow workers to search for unclaimed pension funds.
The dashboard is supported by eleven of the leading pension providers, including The People’s Pension. “The Pensions Dashboard can change the way we do pensions, delivering an infrastructure that has the potential to allow people the opportunity to see all their pensions in one place while driving greater efficiency within the pensions system,” said The People’s Pension CEO Patrick Heath-Lay. “But it must be built first and foremost for savers and have strong, independent, ownership and governance.
Even more worrying are the “lost” pension pots saved with previous employers.
“It is great that the government and industry are working together to make this a reality. It is crucial that we all make the most of this opportunity and the industry as a whole embraces the dashboard.”
The government is apparently deciding whether to introduce legislation to make cooperation with the dashboard scheme compulsory. This should be somewhat moot, however, as the eleven suppliers who have signed up cover a substantial portion of the market.
The full list of pension firms helping to build the dashboard prototype is Aviva, Aon, HSBC, LV=, NEST, Now: Pensions, The People’s Pension, Royal London, Standard Life, Zurich and Willis Towers Watson.