Pension dashboards will not give users the option to consolidate existing pensions, but will a planned guidance journey by MoneyHelper be enough to avoid frustrating consumer expectations? 

 

Pensions dashboards, the delayed government project aimed to engage and reunite people with lost pension pots, will offer a ‘find and view’ service. Using an identifier, it should produce a person's pension account data even if the owner has forgotten about them, and showing their current value. It will not, however, give users the option to take any action on the dashboard itself. 

 

In a Work and Pensions Committee hearing held on Wednesday, head of money and pensions guidance at the Money and Pensions Service, Carolyn Jones, said user research showed that consolidation comes first to mind when people see their various pension pots. 

 

“In our first round of user research, when we said, ‘Well what would you do with this data?’, people said, ‘Oh do I need to all bring it in one place?’,” said Jones. 

 

She said the dashboard “in and of itself answers the question ‘what have I got’, which isn’t very useful in terms of a planning journey because people don’t tend to know what they need, where they have gaps, what might send them off track”. 

 

 

To address the mismatch between, some might say predictable, consumer expectations and the dashboard’s limitations, MaPS is looking to create what looks to the naked eye like a patch. “What we are planning to do is building what we’ve called the Retirement Planning Hub to wrap around the dashboard”, said Jones. 

 

The ‘Retirement Planning Hub’ will answer questions such as how much an individual will need in retirement, and offer budgeting tools and a plan of action, “so people can go from dashboard through a planning journey”, she said, but did not go into detail about how they will find the way from one to the other. 

 

“Our aim with the Retirement Planning Hub is to take them smoothly from [the dashboard]... into a guidance journey that meets that need,” added Jones. 

 

 

Whether consumers will find the offer satisfactory is an open question. During the hearing, committee chair Stephen Timms asked about posters advertising pension consolidation – provider PensionBee was not named – thus inadvertently highlighting the fact that private providers have already recognised what evidently irks pension savers most: having too many small pots. The desire to have a single pension could mean savers might find the dashboard, once it goes live, does not help them nearly as much as they would expect.

 

Principal of the Pensions Dashboards Programme, Chris Curry, was quick to point out that private providers do not offer the ‘find’ service the dashboard will have, where savers can be reunited with pots they may have forgotten about, though he did not say whether this would be enough for consumers to use the service.

 

Curry insisted that the dashboard is not the right mechanism for consolidation, “purely because we think, and government agrees, that there needs to be protection around individuals”. 

Consolidation is “a very individual thing”, he argued. “People think quite quickly, ‘Should it all be in one place, wouldn’t it be easier’. The answer is often, ‘It depends’,” he maintained. 

The government has not always been clear on this point, however. Pensions minister Guy Opperman had previously said that the dashboards would start out as a pure finder service but would not remain so indefinitely, during the third reading of the pension schemes bill in 2020. “At an appropriate time in the future, dashboards may act as a safe space for supporting and safeguarding financial transactions,” he said at the time, adding: “Why would we seek to exclude consolidation going forward?” 

It is also introducing and planning to extend requirements for occupational pension schemes whereby they will have to show they offer value for money and consider consolidation if they cannot.

 

Curry said however that rather than consolidation, any further development of the dashboard might instead focus on information about investments, including environmental, social and governance factors.

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