Pension Dashboard could help cut advice costs and prevent pension scamming
The Pensions Dashboard is not just an opportunity to help educate people about their pensions and better engage them with their retirement planning but also to make pension advice more cost effective and so open up advice to more people. It could also help put an end to pension scams, says Kay Ingram, director of Public policy at LEBC Group
Ingram, who met with pensions minister Guy Opperman this week to talk about the Dashboard, told Professional Paraplannerthat the minister is “very keen” to make the Dashboard happen, as are large sections of the industry.
“We are a big supporter of the Pensions Dashboard. We see a real need for it when we talk to clients. Often people are not engaged with their pension, they don’t see it as their money, they don’t understand what they have or the value of what they have and it can be very difficult to access the information they need to make the right decisions.
“Having the information to hand will mean they can see what they have and they can get advice. We’ve calculated that having access to the information could save £300-£400 in the advice process, and being able to do the advice process more cost effectively and so make it more affordable, would open up advice to more people. It will be a win-win for everybody.”
Ingram also sees the Dashboard as a way of helping prevent scammers getting access to people’s pension money. She suggests that restricting access to the Dashboard to the individual, regulated financial advisers and staff at the Single Financial Guidance Authority, and training consumers to only allow third party access to pensions data via the Dashboard, would immediately flag up when people are unregulated and help prevent scammers from accessing the information. “People are educated now not to give out their pin numbers and using the same principle, this would be far more effective than a cold calling ban.”
Ingram notes that many of the contract-based pension providers are actively engaged in getting the Dashboard implemented, seeing it as a means to save time and money. But other areas of the industry, such as small trust-based schemes may feel “it is a bridge too far” to participate.
“Which is why I think in order to be successful, providing information to the Dashboard has to be made compulsory, even if it takes two to three years to get everyone on board. Giving people partial information about their pensions, while better than nothing, won’t actually solve the problem. According to the ABI there is around £3bn of unclaimed pensions, which suggests people are not getting what they are entitled to.
“We have people looking for advice who have dismissed pensions they set up 30 years ago at the start of their career and maybe only paid into for three years, as not worth pursuing. But when we delve into it for them, with guarantees and indexing, often they are pleasantly surprised at what these pensions are actually worth to them.
“Origo says it has the technology to make Dashboard happen and to provide secure adviser access, we just need the legislation to go through Parliament to make it compulsory and then the industry can take over and run it.”
Ingram sees a single Dashboard as “working better – because everyone will know where to go for their information; what we don’t want is multiple versions of it, because I think that will be confusing for people.
“What we want is access and advice only being given to those with people’s best interests at heart – advisers and guidance staff – who are regulated and will take responsibility for the advice given.”
Also, Ingram doesn’t believe the Dashboard needs State Pension data included to be valuable. “I don’t see it as the be-all and end-all because you can get a State Pension forecast online. If that has to be the compromise to get the Dashboard up and running as soon as possible I think we could live with that.
“It’s the legacy providers and some of the trust-based schemes that can take months to provide information and then only generic fact sheets and not the complete information you need to know, such about as information about guarantees, that we need to ensure are providing what’s needed.
“At the moment it’s like working in the 19thcentury with all the paper records in the industry.”
Ingram believes action should now be taken to get the project moving, with hopefully, a 2019 implementation remaining viable. “The industry has said to government it will implement it and Origo has said it already has the technology in place to obtain the information needed by the Dashboard.
“Every year that goes by more and more people are coming up to retirement and more and more people have got less time to plan their retirement, so the sooner the Dashboard is implemented the better.
“The first step is to get something in place and then we can build on it year by year.”
• Origo, the fintech which developed the pension request search engine for the Dashboard prototype, recently tested it to 15 million users.
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