Pension Dashboards: Fresh Setbacks for Insurers

Insurers and wealth management firms are experiencing new challenges in the rollout of pension dashboards, as the government has decided to prioritize the launch of its own MoneyHelper service.

Private sector stakeholders have voiced their dissatisfaction following statements from Emma Reynolds, the pensions minister, indicating that the state-backed Money & Pensions Service (Maps) will be first to launch.

These dashboards allow consumers to view all their pension pots and commitments in one place, facilitating retirement planning and aiding in the recovery of «lost pots» from previous employers.

The initial vision for the dashboard was to create a multi-provider ecosystem where private firms could offer their versions alongside the Maps service. Companies like Aviva, Legal & General, Scottish Widows, and Fidelity had embraced this concept.

Concerns have been raised by Samantha Seaton, CEO of Moneyhub, a financial technology organization involved in dashboard development. She warned that this prioritization might benefit those who can afford financial advisory services, potentially leaving less knowledgeable savers in a vulnerable position.

The Association of British Insurers has called on the government to mitigate any potential delays. They stressed the importance of the simultaneous launch of both the MoneyHelper dashboard and commercial offerings.

In a statement to Parliament, Reynolds emphasized that prioritizing the MoneyHelper service will provide valuable insights into user interactions, positioning customer needs at the forefront of the design process.

The Department for Work & Pensions has stated a commitment to consumer protection, choosing to favor a state-sponsored solution to mitigate risks related to fraud, cyber threats, and inadequate user treatment.

There is concern that private providers, who have made significant investments in their dashboard systems, may primarily seek to consolidate pension funds into a single managed pot, a move that may not align with the best interests of savers.

Chris Curry, principal of the Pensions Dashboard Programme, acknowledged the disappointment among some private sector participants but reiterated that consumer protection remains the top priority. He dismissed fears that financially unsophisticated individuals would be left behind, arguing that Maps typically serves a diverse clientele.

Approval for private dashboards will only be granted after the MoneyHelper service undergoes a thorough evaluation. The Department for Work & Pensions did not provide a timeline for this process, leading to speculation that it may take years before private dashboards can be launched.

The dashboard initiative, which has garnered bipartisan support, has faced numerous delays and challenges, particularly in connecting 3,000 distinct pension schemes to a centralized system. Originally initiated in 2017, the project is not expected to be fully operational until at least 2026. Additionally, the National Audit Office highlighted issues related to governance and a lack of technical expertise, with project costs increasing from £235 million to £289 million.

Nigel Peaple, head of policy at the Pensions and Lifetime Savings Association, praised the decision to focus on the MoneyHelper service as a prudent measure to reduce risks for government, schemes, and savers alike.