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. This week (December 3rd) the government confirmed that the first pensions dashboard would launch in 2019. However, it also confirmed that there wouldn’t necessarily be a central pensions dashboard. Instead, the finance industry would be able to develop their own versions (cue confusion!).
The government is currently consulting on exactly what the pensions dashboards will look like. This is what it’s said in its consultation document:
- The pensions industry is best place to develop and design the pensions dashboards.
- A non-commercial dashboard would also be developed alongside the commercial ones. This would be for people who prefer to use a non-commercial dashboard.
- State pension entitlement is unlikely to be included in the pensions dashboards when they first go live. Instead, the dashboards will be able to link to the Gov.uk website section where you can check your state pension entitlement.
- Not all pension schemes would be included from 2019. Pension schemes would be able to provide data to the pensions dashboard(s) from2019 on a voluntary basis. However, public sector schemes would need longer to be able to develop systems to share their pensions data safely.
- It will take three to four years before most of the pension schemes are part of the pensions dashboard.
- There will be a single ‘pension finder service’. This will be a service that you can use if you have lost touch with a pension. The reason there will be a single pension finder service is to reduce the opportunity for commercial companies (that charge a fee) to exploit customers who may think they’re dealing with the official service.
Q. What information will the pensions dashboard have?
I went to a meeting in 2017 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, definitely not in the early stages. Initially, companies will sign up on a voluntary basis. I imagine (private) pension companies will be quite keen to sign up.
It’s a bit more complicated for workplace pensions, especially if they are salary-related pension schemes. When the pensions dashboard launches in 2019, quite a few company pension schemes may not 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. 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 will 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? I think it will depend on who’s providing the pensions dashboard.
You can respond to the consultation by filling out an online feedback form. You must do this by January 28th.
Photo: Image from ABI pensions dashboard project.
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