If you have several pensions, it should be easier to keep track of them in the future as the pensions dashboard is due in 2019. But what is the pensions dashboard and how will it help you?
What is the pensions dashboard?
A. The pensions dashboard is currently being developed and is due to launch in 2019. The idea is that you’ll be able to see all of your pensions in one online site.
I went to a meeting today to look at what information could be included and how the dashboard could work. Here’s some of the information that could be included:
- The income you may get from each of your pensions at retirement. This would be an estimate of your income because the amount you get each month would depend on how you generated that income as well as how much your pensions were worth at retirement.
- The value of your pensions at retirement. This would be an overall fund value if it was a pension ‘pot’ type of pension (called a ‘defined contribution’ pension in the jargon). If it was a salary related pension (such as a final salary pension – or a ‘defined benefit’ pension in the jargon) there is no pot as such as the pension scheme promises to pay a pension of a certain level per year. That means you may not get an overall figure but may just get a monthly income figure as described above.
SAVVY TIP: Under current plans, the pensions dashboard would have to make some assumptions about how much your pension might grow in the future and what inflation might be, but it would not make any assumptions that you would continue to pay in more money.
- How much your pensions are worth at the moment. This would be an overall figure for each pension you have.
SAVVY TIP: This ‘current valuation’ may not be today’s value as the dashboard won’t generate any information itself, it will just take information provided by pension schemes. So, instead it will use the most recent valuation. It is possible that the information produced by the pensions dashboard will be different to that from your most recent pension provider’s statement. That’s because it may use different assumptions about inflation and charges.
Q. Will I be able to see information about all my pensions?
A. No, quite possibly not. At the moment, 16 pension companies have signed up to the pensions dashboard scheme. However, it’s early days as it’s not due to be launched until 2019. It’s reckoned that 20 – 30 pension companies have around 80% of the pensions market (for pension pot type pensions).
It’s a bit more complicated for workplace pensions, especially if they are salary-related pension schemes. It’s quite likely that when the pensions dashboard launches in 2019, a number of smaller company pension schemes won’t have signed up to provide information. That number could be quite large, unless there’s an incentive for them to provide information to the pensions dashboard or unless they’re given help with the costs of doing this.
Q. Where will I log on to access the pensions dashboard?
A. For a start, you can only use this online. It sounds obvious, but it’s worth pointing out that there won’t be a paper-based equivalent. At the moment, it’s not been decided whether there will be one pensions dashboard or several different ones.
Either way, these are the steps you’re likely to have to take:
Step 1. You will register to use the pensions dashboard by verifying your identity through the Gov.uk website. What this means is that if you’ve used any of the government digital services, such as signing up for a state pension statement, paying tax etc, you’ll be able to use your Gov.uk log in to verify who you are.
If you haven’t used the Gov.uk website, the plan is that you’ll be able to click on an icon from your pensions provider and register using these details.
Step 2. There will be two-step authentication, which means that you’ll be sent a code – for example, to your mobile phone – that you’ll have to tap in before you can log in.
Step 3. You’ll then be asked to give consent for your ID information, such as your name, address, National Insurance number and date of birth, to be shared with the pensions dashboard. This is in order for the pensions dashboard to be able to retrieve information about your pensions.
Step 4. You’ll be asked to confirm that you agree to the pensions dashboard retrieving your information from the pension providers.
SAVVY TIP: Under the current plans, the pensions dashboard will show you information about pensions that are an exact match for your name, date of birth and National Insurance number. There are plans that if a pension is found that matches two out of the three ID factors, such as your date of birth and National Insurance, but not your name, you could be told that there may be a pension for you with pension provider A, for example, and you should contact them to find out more information. You’ll then be given contact details for pension provider A.
Q. How will I know if I have pensions with companies that haven’t signed up to the pensions dashboard?
A. This is – in my view – crucial. This part of the project is up for grabs as it hasn’t been decided at this level of detail. I – and several others – said it was important that people using the dashboard know that they may have pensions that don’t show up on the dashboard.
One way of doing this would be to have a timeline, which would show when you were a member of certain pension schemes and where any gaps are. This would mean that you’d be prompted to find out information about pensions you know you’d signed up to during the ‘gap years’. Another option would be to list the years where you’ve not joined a pension scheme.
Q. Will the pensions dashboard help me to find lost pensions?
A. The pensions dashboard could point you to the pensions tracing service to help you track down lost pensions. You can find out how to track down a lost pension in my article called Finding a lost pension plan.
Q. Will the pensions dashboard help me to save more?
A. One of the questions I had is ‘what is the pensions dashboard for?’ – as in, when you’ve finished your pensions dashboard visit, is that it or are you shown the difference that paying extra into your pension could make to the amount you retire on?
Photo: Image from ABI pensions dashboard project.
How will the government’s Pension Wise guidance service work?
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