With something like 50m as a target customer base, the Treasury’s announcement that they will be allocating £5m to the Pensions Dashboard , suggests it is worth around 10p per tax-payer next year. My maths might be deficient , we might hypothecate 20p from each tax-payer but the grant to the DWP is still meaningless.
All we can read from Phillip Hammond’s statement is that the Treasury still wants a dashboard but that they don’t see an argument for paying for it. This is a long way from where we started back in 2016 and shows the folly of cutting the dashboard from its umbilical – the source of its funding. The Treasury no longer owns it, the Treasury no longer funds it.
And of course we are no longer talking of the Pension Dashboard in anything other than conceptual terms. Whatever is built will be multiple and people will be able to see their pensions in a number of different ways. This was the original conception and was part of a wider Treasury strategy to increase digital innovation in the private sector. The move towards Open Pensions is being resisted by a small cadre of pension providers who wish for the dashboard to be centralised and Government controlled. I find it extraordinary that this is considered a good idea.
Infact I’m quite encouraged by the Treasury’s position on this. If Phil Hammond can entice the mouse our of the skirting board for £5m of crumbly cheese, then the mouse will have to scavenge and compete in the kitchen. A big lump of money would be gorged like a big chunk of Gouda, the mouse would be fat before we got a dashboard.
So get on with it DWP, listen to what the paymaster is saying, there is a will for the dashboard to happen but no money for it – the money and the scavenging must happen within the pensions industry.
Talking of which, I’m busy raising money for AgeWage and know very well how asking for it , focusses the mind on what the value proposition is. My focus with my start-up has to be 100% on the consumer – without a product the consumer uses, all financial justifications fall away.
What is critical is that we understand what the dashboard will be used for and what it can hope to achieve. The Government has plenty of data on what the problem is, TPAS, the Money Advice Service and Pension Wise have been keeping records of the thousands of conversations we are having , explaining where we feel ourselves in need of help, guidance and advice.
I’ve had the chance to discuss this data with those who nobly work in these organisations, because social media lets me. This data drives my understanding of what the dashboard can do and should deliver.
Currently we are stuck. We have multiple pots and no idea what value we are getting from or what we are paying for them.
A dashboard should not just find these pots but allow us to interrogate them for the secrets within the fund values. We should be able to know the internal rate of return of each pot, how much we’ve paid for that return and how much value for that money we’ve had.
If we know what we have, know how it’s done for us, we can then perhaps move on to the trickier question of how to organise our money to spend it.
We are the Treasury’s muppets – and they hope we stay that way
Ah – but that’s the thing neither the Treasury or the providers really need us thinking about!
Providers want and need us to hang on to our pension savings so that they can extract the last penny of value from us – before either we or our pots run out.
The Treasury is spending 10-20p on each of us, in the hope of our spending our money as suits the Treasury, as fast and as stupidly as possible
The Office for Budget Responsibility’s fiscal outlook, published alongside Monday’s Budget, reveals a significant upgrade in the estimate pension freedoms tax take for 2018/19.
Page 113 of the OBR report says the Treasury will net an extra £400million in tax as a result of people paying tax on their retirement withdrawals.
Based on the Spring Budget 2017 costings– which factored in a tax take of £900million in 2018/19 – this suggests a near 50% increase in revenue raised from the policy this year to £1.3billion, taking the total tax generated by the policy to £5.5billion.
We are as a nation, spending our savings like muppets. Perhaps this is the secret message of that £5m grant to the DWP and to providers.
“If you want your customers spending their pension pots on propping up Government finances, then sit on your hands.
If you want people to get value for their pensions money, give them the tools to cease their muppetry!
The Treasury has neatly outsourced the pension dashboard – the trouble is that the way we are going – our problem is its fiscal solution.