• Over half (54%) of respondents to AJ Bell survey* say they would be less likely to use a pensions dashboard containing partial information on their retirement pots
• Over a third (38%) say dashboards would help them manage their pensions better
• Meanwhile, a fifth (20%) say pensions dashboards would encourage them to save more for retirement
• New research comes as Government confirms legislation enabling pensions dashboards in Queen’s Speech
• Pension Schemes Bill also includes new powers to fine company directors, pension scams clampdown and collective DC also given the green light
Tom Selby, senior analyst at AJ Bell, comments:
“Boris Johnson’s brand new Government has, as expected, confirmed pensions dashboards will be introduced in the UK.
“Over the long-term dashboards have the potential to revolutionise retirement saving, helping millions of savers understand how much their pensions are worth, what they might generate as an income in retirement and how they could get a better deal by shopping around. This engagement is absolutely critical in a world where defined benefit schemes are dying out and the majority of people keep their pension invested via drawdown in their later years.
“However, under plans outlined by the previous administration, the introduction of dashboards will be phased, with schemes not required by law to provide the necessary information for up to 4 years. As a result, the first versions of dashboards will not show all of people’s retirement pots in one place.
“Over half of respondents to our survey said this would put them off using dashboards, which is unsurprising given many people’s user experience is now driven by slick online banking and financial planning apps. The Government will need to be mindful of this as it begins rollout of the first versions of dashboards in 2020.
“Provided early users aren’t terminally turned off dashboards, it is clear there is significant demand for more retirement information and engagement among UK savers.
“Well over a third of respondents to our survey said dashboards would help them manage their pensions better, while a fifth said they would be encouraged to increase contributions if they could see all their retirement pots in one place.
“It is clear from this that the priority for this Government should be testing and building dashboards that work and allow savers to properly engage with all their pension pots. While dashboards should be made available at the earliest possible opportunity, rushing to launch half-baked versions would be an unnecessary risk.”
Pension Schemes Bill - New powers to fine company directors, pension scams clampdown and collective DC also given the green light
“Given the Pension Schemes Bill was ‘oven-ready’ in October, it is no surprise to see the other key measures now brought forward as part of the Queen’s Speech today.
“The Bill sets out severe punishments, including possible prison sentences, for company directors who neglect defined benefit schemes. This comes in response to a series of high profile corporate failures – most notably BHS and Carillion - which have resulted in members being hit with cuts to their pensions.
“The Government will also bring forward long-awaited legislation designed to strengthen the ability of pension providers to refuse a pension transfer where there is evidence the scheme someone is moving to is being used to facilitate scam activity.
“Previously there has been a real tension between the right of savers to move their money to a different scheme, which is clearly very important, and the responsibilities on providers in blocking transfers to suspect schemes. Addressing this tension will help ensure fewer people fall victim to pensions fraud.
“Finally, after years of debate new rules and regulations enabling collective defined contribution, or CDC, schemes to be offered to UK savers will be brought before MPs.
“Versions of these schemes, which sit somewhere between old-style defined benefit arrangements and more modern DC plans, have been introduced in other countries, to varying degrees of success.
“Royal Mail has pledged to shift its members to a CDC scheme once the rules are in place, although there has been little sign of significant demand from other employers.”
*Research conducted online with 1,427 AJ Bell Youinvest customers during November 2019.
A government backed initiative is to develop pension dashboards. Pension dashboards allow you to see information from multiple pensions in a single place online. Do you think this would help you to manage your pensions?
Yes: 38.5%
No: 45.3%
Not sure: 16.1%
Do you think a pension dashboard would encourage you to save more?
Yes: 20%
No: 67.6%
Not sure: 12.4%
If a pension dashboard showed some of your pensions but not all of them, would that put you off using it?
Yes: 54%
No: 27.1%
Not sure: 18.9%
What information would you prefer a pension dashboard to show?
How much my pensions are worth at the time: 16.1%
The income my pensions could provide in the future: 5%
Both of the above: 65.8%
Don’t know: 13.1%
