• The influential Work and Pensions Committee has criticised the Government for failing to commit to a timetable for making state pension data available for Pensions Dashboards
• Private and public pension schemes expected to offer up data in stages over the next 3 to 4 years
• Government also commits to reviewing the automatic enrolment charge cap, with specific focus on the application of flat-fees to dormant pots
Tom Selby, senior analyst at AJ Bell, comments:
“Pensions Dashboards have the potential to revolutionise retirement engagement in the UK – but only if savers are able to see all of their pots in one place.
“Given the state pension is the foundation upon which people build their retirement plans, it is critical the Government makes this information available via Dashboards as soon as possible. Without total coverage of people’s pensions, both state and private, the impact of the reforms and usefulness of Dashboards in enabling better retirement decisions will be limited.
“Failure to do this would be a huge wasted opportunity and risk undermining the success of the entire project. It would also send an incredibly negative message to consumers and the pensions industry about the Government’s own commitment to Dashboards beyond positive words.
“While we know the implementation of Dashboards will be a slow burn, a timetable to provide data as suggested by the Commission should help focus minds and expectations.”
Auto-enrolment charge cap review
“The auto-enrolment charge cap is ripe for review and in that context it makes sense to look at the application of certain charging structures too. Clearly the risk with flat fees is that small pots can be eroded to zero, which clearly isn’t a good outcome.
“More broadly, it is important workplace pension providers who are benefitting from economies of scale are encouraged to pass these on to savers.
“Even a small difference in charges can add thousands of pounds to the value of someone’s retirement pot over the long-term, and it is important the Government doesn’t settle for 0.75% in a world where inertia continues to dominate consumer behaviour.”
