Government 2- Savers 1? (guest blog from Ralph Frank)

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The announcement of Government’s pivotal role in bringing a pensions dashboard to life in the UK by 2019 was one of the rare highlights of the 2016 Budget.  The initiative has been widely welcomed.  HM Treasury is seen to be supporting savers in gaining a better understanding of their aggregate savings.  Savers will benefit from having this consolidated view of their provision for later life and consequently be able to manage this aggregate more effectively.

 

The announcement of the dashboard raised questions as to whether this initiative was the first step in reviving the concept of ‘pot follows member’.  However, this link has been denied.  The dashboard will certainly make it easier for members to move their own legacy savings as they change pension providers.  Who knows if an automated facility will follow in time?

 

The dashboard will also make it easier for HMRC to receive information about pension contributions, accumulated savings and payments.  The digitalisation of pensions-related reporting to HMRC is consistent with Government’s drive to increase the efficiency of the way interaction takes place with tax-payers.  A similar initiative went live in 2013 with the introduction of Real Time Information (“RTI”), which digitalised the reporting of Pay As You Earn tax.  The cost of the introduction of RTI was borne by industry too.

 

I remain supportive of the concept of a pensions dashboard.  I expect that the dashboard will facilitate more holistic, and consequently effective, financial management and planning by savers and their advisers.  Any measures that make interaction with HMRC smoother are welcome too.  The same applies to ensuring that any tax due is actually paid, thereby spreading the load across the tax-payer base.  However, I am left with a feeling that Government will gain more benefit from the pensions dashboard than savers.  Is the dashboard a case of multiple parties making progress, albeit some to a greater extent than others, or have I missed  something more fundamental?

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About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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