I’m not sure about the provenance of his info (the link is broken) but Paul doesn’t tweet without good reason. This is important.
Minister confirms what I wrote recently, the state pension – which is the biggest part of the retirement income of many – may not be included in pensions dashboard https://t.co/vti6bI4FPG no dash in dashboard indeed.
— Paul Lewis (@paullewismoney) October 23, 2018
Thanks to FT Adviser’s pension guru, Maria Espadihna, I can give you the proper link which confirms what Paul was reporting – the state pension is not certain to be part of the dashboard project – as considered in the upcoming (Sic) DWP feasibility report.
The tweet hints at something I’ve been thinking for some time; that the pensions dashboard is going to be no such thing – it’s going to be a “retirement savings” dashboard.
If you can exclude the state pension , you can let off the occupational DB schemes including the tax-payer sponsored schemes – the LGPS and the unfunded pension schemes.
Let’s face it , knowing what you are getting from these schemes isn’t hard, it’s a defined benefit!
Unless you decide to cut and run, taking a transfer where you can, your defined benefit pension doesn’t need a dashboard, it just needs a link – which is what the Government Gateway is. Nice as it sounds to have pensions alongside pension pots, there’s a counter argument to say that it’s thoroughly confusing. A pension pot is nothing to do with a pension – unless you decide to annuitize it – by purchasing an annuity or exchanging it for rights in a DB scheme.
So – heresy as it is to say it – I’m not that fussed if the Government keeps the state pension, its other unfunded pensions and even funded DB pensions “off-dashboard”.
Infact , I suspect that in doing so , it might put the dash back into the dashboard!
Not just a dashboard – we need a steering wheel!
I’ve said it before and I mean it. People have three fundamental concerns about their retirement savings
- What have I got?
- How has it done?
- What should I do?
Nobody should have too much difficulty finding a DB pension – there’s a flipping link on the DWP website that helps you do it. It isn’t hard. Here it is
But finding out what you’ve got and getting it on a single “dashboard” screen is a lot trickier, you can pay Experian to search their orphan asset register, you can rummage through your bottom drawer or you can play pension detective yourself. But it is a tough job tracking down all the bits and bobs, especially as most of the companies you worked for have by now changed names or merged, the same can be said for the insurers and third party administrators that looked after their pension arrangements. As for personal pensions – you need to be an archivist to work out who owns what!
So we need a dashboard pension finder service.
We also need some way of working out what our retirement savings have actually done for us. I say this because everyone I know who gets a pension statement with a fund value on it, asks the same question – “have I done alright?”. It’s human nature, you have given people your money for a number of years and you want to know whether you got lucky, picked a winner, got value for the money you gave them!
And finally we need to know where to go with all this money, we need the steering wheel to drive our swag off into retirement with a plan that ensures that our car doesn’t run out of petrol but takes us to some nice destinations.
Frankly this is quite enough of a headache for most of us without having to wonder about “pensions” ! Pensions are something altogether different, they are the wage in retirement things we used to get from work – or still do if we work in the public sector.
People are quite up to differentiating between what they get as a pension, and what they get as retirement saving. Some will even want to top up their pension by converting retirement savings to income for life (see above) , but the dashboard is really about the money we’ve already saved.
The dashboard cannot in itself be a holistic financial planning tool
I am sorry to dash the hopes of financial planners country-wide, but the chance of getting a single view holistic dashboard from which people can plan their financial futures is pretty well zero. Frankly the inclusion of the State Pension (and other DB) on the dashboard is a nice to have at best or a confusion at worse. I am not upset at the prospect of the state pension not appearing on my dashboard, I am quite capable of factoring it into my financial planning so long as I can find out what it gives me and when.
Take the State Pension out and give me the tools to find my pension , see how its done and work out how to spend my money – and I’m done! Give me a dashboard and a steering wheel!
Now get on with it!
We’re supposed to have this dashboard up and running next year. Fat chance at this rate of progress. This great report due out from the DWP in March is already 7 months late and it doesn’t show any signs of appearing any time soon.
The DWP bit off more than it could chew, got bamboozled by the ABI with all kinds of nonsense about compulsion and a single state delivery mechanism and is now having to walk carefully away from those promises.
The DWP should be explicit about what it can and cannot do (with the emphasis on the latter) and now let the private sector do for pensions what they did for banking (e.g. open them up!).
Enough fannying around and leaking of this and that through the trade press. Guy and Esther should publish and be damned! In my view they will be damned a lot less, for being brave, honest and accepting that what we need is a retirement savings dashboard and a proper portal to our pensions!