The Department for Work and Pensions has published its response to its consultation on pensions dashboards.
Some of the main details from its plans include;
- The Single Financial Guidance Body (SFGB) which has recently been renamed the Money and Pension Service, will lead the delivery of the initial phase of the project and will bring together a delivery group made up of stakeholders from across the industry, consumer groups, regulators and government.
- The government will put forward legislation to require pension schemes to make consumer data available to them through their chosen dashboard.
- Pension schemes will need to participate in the dashboards in mandatory stages and will need their data to be ready within a 3 to 4 year timeframe.
- The State Pension will not be included immediately but will be part of the service at the earliest possible opportunity.
Jonathan Watts-Lay, Director, WEALTH at work, comments;
“Anything which helps individuals to understand how much they have saved in their pension is a good thing. However, pension dashboards should be viewed with caution as there will be limitations.
For example, it’s important for individuals to think holistically when planning their retirement income – as it’s no longer just about pensions but all types of savings such as ISAs, share schemes and so on. As dashboards will only consider pensions, there are clear gaps here.
Whilst being able to view their entire pension saving in one place will be helpful, members also need support on how best to take income from all their different sources of retirement savings, and how to do this in the most tax efficient way.
A dashboard, whilst useful, is very much only part of the picture and clearly does not get employers and Trustees ‘off the hook’ for putting in place an appropriate retirement service which includes financial education, guidance and regulated financial advice, to help ensure employees and members do not make poor decisions.”