I realized , as I filled in my submission to the Pension Dashboard Programme’s call for input (you can do yours here), that for my generation, the boomers, the dashboard will arrive too late. Most of our pensions are either in payment or meaningfully managed by advisers. The less affluent are more in need of help with benefits than managing their savings.
I am a boomer, my pensions are coming into payment. I have access to advice as I am in the mass affluent part of boominess. Those less fortunate are more likely to need help with benefits than managing their savings, their financial affairs are going to be organised around the state pension, universal and pension credits and (if they are lucky) unlocking the value of their house.
For the generation that follows me, pensions are so complicated that the dashboard is likely to be overwhelmingly complex. If the pensions dashboard is built around the needs of Generation Y , educating them to understand their pensions, I fear it will not deliver in time . I explain this further later on.
For this generation, the pensions dashboard can be of help and I suspect it will arrive in time for them. In our submission , I point out that millennials started taking out pensions at the time when stakeholder pensions arrived. They may not have joined DB plans and if they did, they did not accrue long enough in them for those plans to matter. This is the first generation that has clean DC and they have most to gain by consolidating pensions into one pot and turning the pots into a retirement plan.
For those like my son, who are starting their careers today, the cpncept of a pension dashboard is probably already obsolescent. Whatever happens over the next twenty years is likely to offer this generation options to manage their financial affairs that we cannot currently imagine.
We are done
By the time dashboards are up and running it will be too late for the Boomers. If the dashboard is built Gen X it will deliver too slow and be overtaken by other ideas – there are questions in the PDP call for input that suggest that the PDP are going to take on the complexity of some of the complex pensions owned by this generation
If the scope of the initial “MAPS” dashboard is to include ERI for multiple tranches of DB pensions, then it will not be a minimum viable product, the dashboard delivery date will way beyond 2025 and for many Gen X ers that will already be too late. The designers of the dashboard (the PDP) could see the whole dashboard project flounder if they focus too heavily on Gen X, Gen X need to become more self-sufficient, use the resources from MAPS, from their scheme managers and take advice. If the dashboard is to be relevant to them , it will need to help them understand the risks of losing safeguarded benefits from the complex products sold them prior to 2000.
Support the young
There is a generation – the millennial generation for whom the pensions dashboard will deliver. This generation have clean pension policies and lots of them. They want to find their money, manage their pots into one and then set up retirement plans that work for them.
This is a generation without the complexities of DB plans or legacy DC pensions and it is a generation that is currently feeling deprived. Take this comment in today’s FT (this link is free to read)
If the dashboard has an overriding purpose, it is to help millennials get back on their feet.
Support the young, we are done!
There was a time , five years ago, when I thought that a private/public partnership could deliver boomers and GenX the support they needed to manage their pension affairs. I now think this unlikely, those who are by now over 50 need much greater help than a simple dashboard can deliver and if the dashboard is designed to sort out our problems (multiple ERIs with multiple payment dates for instance) then it may never deliver at all.
The insanely complicated pension system is too heavy a load for a dashboard
To the PDP question 7
Are there any segments of the population for whom the majority of their pensions could be covered early by selecting a subset of pension provider/scheme types?
the answer is
This generation should reasonably expect to see all their pension pots on a dashboard within the next three years with some very serious questions to be answered by providers who post 2000 pension policies that cannot API to the pension finder and MAPS service. The minority with occupational DB rights need to have separate conversations with their public sector pension schemes
But we are a long way from getting there. Pension Bee says that most of their customers are still only able to see 60% of their pots through a digital search .
If the pension dashboard provides the millennials with a single view of all their DC pots, it will have given a bit of help getting them back on their feet.