Pensions dashboards

This Commons Library Briefing paper looks at the debate on the pensions dashboard, which is being developed to enable people to view all their lifetime pension savings (including their state pension) in one place

A pensions dashboard is a digital interface that enables people to see all their lifetime pension savings in one place. Dashboards seek to provide better access to pensions information so that individuals can make better decisions about their retirement plans.

Background to pensions dashboards

Recent labour market and pension reforms have made the need to improve access to information more pressing. Pensions have become more complex and individuals have taken on greater responsibilities for saving and investing for their retirement years.

In 2016 the Financial Conduct Authority (FCA) said a dashboard was needed. It said the data for this should ideally be retrieved directly from providers, be updated in real time and contain projections of pension income based on different scenarios. A Pensions Dashboard Prototype Project later showed that it would be possible to build such a dashboard in the UK.

In Budget 2016 the Government said it would ensure industry designed, funded and launched a pensions dashboard by 2019. This deadline was not met.

Developing pensions dashboards

DWP published the findings of a feasibility study on 3 December 2018 and launched a consultation. In April 2019, the Government’s response to this confirmed that:

• Industry would design and develop its own dashboards. The Single Financial Guidance Body – now the Money and Pensions Service (MAPs) – would convene a delivery group to help ensure that this happened safely and securely.
• Multiple dashboards would improve consumer choice but should exist alongside a non-commercial dashboard hosted by the SFGB offering an impartial service to those who prefer it, or who may not be targeted by the market.
• The Government would legislate to require pension schemes to provide individuals data (with their consent) via pensions dashboards. This would follow the creation of “a robust delivery model with the appropriate governance.”
• There might be merit in exempting some schemes from compulsory participation, such as Small Self-Administered Schemes (SSAS) and Executive Pension Plans (EPP).

MaPS Pensions Dashboard Programme

The Government would work with the industry delivery group to integrate the State Pension into pensions dashboards.The MaPS Industry Delivery Group (now called the Pensions Dashboard Programme) began operating in autumn 2019. It published a programme update in April 2020, in which it set out some of the challenges and said it hoped to provide a clearer timetable for delivery before the end of 2020.

Funding for pensions dashboards

In the Autumn Budget 2018, the Government committed funding for 2019/20 to “help fulfil its role in facilitating industry to make dashboards a reality”. However, it said that in the longer term the costs should be met by the pensions industry, possibly through existing industry levies.

The Government has produced cost estimates for three scenarios with different data requirements and coverage to highlight the potential range of impacts on the pensions industry. Under these scenarios, estimated one-off implementation costs range from £200m to £580m over 10 years and ongoing costs range from £245m to £1.48bn over 10 years.

Legislating for dashboards: Pensions Scheme Bill 2020

On 7 January 2020, the Government introduced the Pensions Scheme [HL] Bill 2019-21. Part 4 of the Bill contains provisions, which provide a framework to support pension dashboards. Clauses 118 and 119 would amend the Pensions Act 2004 by inserting new sections in Part 4 (financial planning for retirement) of that Act.

Three key amendments were agreed to or voted on at Report stage in the Lords:

• The Government tabled Amendment 62 (alongside consequential amendments) to Clause 122 of the Bill inserting a requirement for MaPS to provide a pensions dashboard service.

• The Opposition successfully tabled two amendments to the Bill that would:
  • Exclude financial transactions from the Pensions Dashboard (Amendment 52 to Clause 118); and
  • Require the MaPS dashboard to be up and running for a year, and for the Secretary of State to lay a report to Parliament on the operation of that service before other commercial dashboards could be launched (Amendment 63 to clause 122).

Third reading is scheduled for 15 July. As of 8 July no dates have been set for Commons scrutiny of the Bill.