The Pensions Dashboard – your online pension finder
Throughout your working life you build up savings for when you retire, both in the state pension provided by Government and in pension schemes you have through your job or have set up for yourself.
At the moment you usually look at these pension pots separately. The Government estimates that people will have eleven jobs during their careers; this will likely mean eleven different pension pots. That can make it hard to keep track of all your pots and work out how much money you’ll have when you stop working.
Pensions dashboards should let you see all of your pension pots all together - in an online place that you can choose. The Government’s objective is for the service to be available to consumers by 2019.
To make this happen, a group of businesses from all across the pensions industry has been working with Government, regulators and technology companies to create a prototype and start to look at what rules and regulations would need to be in place to enable these dashboards. The prototype project has designed and developed the behind-the-scenes technology which could eventually help people find all the pension savings belonging to them among over 60 million pension pots, along with information about their State Pension.
How will pensions dashboards work?
The technology has four basic steps:
1) You confirm your identity using a process like gov.uk/verify which is already offering secure online access to information such as details on your State Pension and tax returns.
2) You click a box to officially give the dashboard permission to share your information with multiple pension schemes and providers, or a third party connection they might be using.
3) Queries are sent to all the different pension schemes and providers to look for the pensions pots which match your details, including the State Pension.
4) The system reports back on all the pensions it has found to a single page, showing the names of the schemes and their estimated value at a particular retirement age. There will also be an estimated value at the top for your combined monthly or annual income in retirement. In most cases, this will only take a matter of seconds.
It’s expected the dashboards will also allow you to click on each pension pot to get more information about your savings and to view contact details for that scheme.
The pensions dashboard system does not involve creating a large store of pensions data. The technology fetches and delivers back the relevant information when an enquiry is made via the system.
Not all pension providers will have to connect directly to the dashboard system. They may also choose to connect via another service which will handle their data on their behalf.
Why are pensions dashboards needed?
The Department for Work and Pensions says people now have an average of eleven different jobs in their lifetimes, which could mean an average of eleven different pension pots to keep track of. Different schemes keep in touch with savers in different ways, for example by sending annual statements in the post or by providing a web portal. However they can only share information about that particular pension scheme - they can’t show what money you might have overall for your retirement.
People can find it hard to keep track of all their different pensions. There is already an estimated £400 million in pension savings going unclaimed because people don’t know where they are, or how to access them.
On average, people are living longer and will spend more years in retirement. This means it is more important than ever that people plan ahead for when they stop working and think about building up the money that they will need. This is much easier to do if you can see your retirement savings so far all together in one place.
Why doesn’t a system like this already exist?
The UK pension system is very fragmented. There are thousands and thousands of pension schemes which need to co-operate to create a system like this, including defined benefit schemes run by Government, workplace schemes created by businesses and personal schemes offered by pension providers. Some pension information that is still relevant today dates back to a time when records were kept on paper.
Gathering pension information in this way and providing it online is also very complex because there are important data protection rules to consider, data security issues to address, and common approaches need to be agreed on how information will be shared and presented. The pensions industry cannot sort all of these issues out alone.
If the prototype has worked, why do I have to wait until 2019 to use this myself?
The prototype has proved that the technological challenges of agreeing data standards, verifying people’s identities and reporting information back in a secure and meaningful way can be done, but this is only part of the solution. Setting up a service like this cannot be done by the pensions industry alone but needs support from the Government and regulators to agree rules for how it will operate. The pensions industry is ready to support Government in deciding how pensions dashboards will be run and how the firms that operate and work with them will be regulated.
Before pensions dashboards go live, it is critical that the right protections are in place to prevent fraud, keep data safe and give people confidence in using the systems.
Who decides how the final service is going to operate?
The ABI has project-managed the prototype stage of the pensions dashboard for HM Treasury and on behalf of the wider industry, but it does not make decisions about government policy on the pensions dashboard or on how regulation will work. The ABI is ready to contribute ideas and take part in consultations as these important decisions are made by the appropriate bodies. The priority is to put a framework in place which provides the best possible service to consumers.
Does the prototype use real data?
Because of strict data protection rules, the prototype project itself was not able to use live data but has done its work based on a large data set which mimics real life pensions data. The pensions dashboards available for public use from 2019 will use real, live data, and the prototype project has shown how this will work.
How can I be sure my data will be safe when the full service is rolled out?
The pensions dashboard system does not involve creating a large store of pensions data. The technology fetches and delivers back the relevant information when an enquiry is made via the system. The process to confirm the identity of users is based on the gov.uk/verify system which has already proved to be a secure portal for people accessing personal information.
The regulation of future Pensions Dashboards, whether by the Financial Conduct Authority (FCA) or by a new independent body, would be able to insist on certain data and security standards for all firms interacting with Pensions Dashboards.
What can I do to find out about my pension savings in the meantime?
There is already an online service you can use to find out what your State Pension is likely to be when you retire. All the firms and schemes you have pensions with should provide you with information about your funds on request. Providers will also send you annual statements. It’s important to keep your personal details up-to-date with all your pension providers, for example if you move house.
If you think you may have lost track of a pension, the Government provides a Pension Tracing Service which is online here. You may be able to find some details for yourself by speaking to former employers and checking through old paperwork.
The ABI provides an online Register of Consolidations here, which can help you find out which company is now responsible for pension schemes which have been transferred to different firms.