For some time now the government has been promising an online ‘pensions dashboard’ that will let savers view and manage all their pension arrangements in one place. Meanwhile, private pension providers are competing to deliver a similar service to cover their own products. So who’ll win the battle of the dashboards - and what's the prize for consumers?
The government’s promised ‘pensions dashboard’, initially scheduled for spring 2017, is still in development, with the new release date now scheduled for 2019. However, there are concerns that the project may be further delayed due to the need for new legislation to support the dashboard, which may be further complicated by the pressures from Brexit.
What will the dashboard do?
The premise of the pensions dashboard is to allow people to see and manage all their pension savings in one place, to give savers a clear idea of exactly how much income they can expect in retirement. It is hoped that this will encourage people to save more by making them more aware of the need to do so, and show them how their money is working and growing for them. It should also raise general awareness of private and workplace pensions.
The average person has around 11 employers during their career, potentially meaning 11 different workplace pensions all at different levels and invested in different funds. Sometimes these pots are never tracked down – an estimate £3bn worth of pension pots are currently unclaimed. The dashboard, a preview of which was unveiled in April 2017, should reduce this loss as well as incentivising savers.
Private providers join the tech race
With the government’s dashboard potentially facing delays, private providers are now jostling for position in the new ‘high-tech pension’ race. Innovative pension provider Smart Pension has developed a new app that on first glance offers a strikingly similar kind of service. Called the Smart Pension ‘skill’, it works on hands-free technology via the Amazon Echo and Alexa devices, allowing users to ask direct questions such as ‘How much do I have in pension savings?’ or ‘How much of my income am I contributing?’ and request investment reports, retirement income projections and other information.
The timing of the app’s release is significant. Will Wynne, co-founder of Smart Pension, said: ‘The pensions industry has seen very little innovation for decades - it's time for pensions to catch up with innovations in banking and the broader tech ecosystem. Auto-enrolment has given the industry a unique opportunity to engage with a new generation of savers, but if it's to succeed long term, it must develop a very different conversation, because it's a very different saving mentality.’
The appeal of pension apps
The app only works for members of Smart Pension schemes, so is not in direct competition with the government’s proposed dashboard, which will cover all pension schemes throughout a person’s career. That said, the offer of an online pensions control panel has great appeal for savers, and is likely to encourage people towards schemes that offer such a service, and to stick with them if possible even when they move jobs.
The Department for Work and Pensions (DWP) is now driving the development of the government’s pensions dashboard, having taken over from the Treasury. A feasibility study is expected in March, which should give a clearer indication as to when we can expect the real thing to be released. In the meantime, private pension providers may well be tempted to follow the lead of Smart Pension and develop their own online offerings.