Pensions dashboard | People's Partnership

Savers are at risk of losing out if Value For Money framework is not included on pension dashboards

B&CE, provider of The People’s Pension¹ which serves 1 in 6 workers across the UK, has warned that savers are at risk of losing out if the proposed Value For Money (VFM) framework is not included on pension dashboards.

New research² from the leading pension provider has found that more than two out of five pension holders (43%) are likely to move their savings from one pension provider to another if they could do so via a website that allowed them to see all their pensions in one place. But more than four in 10 (45%) wouldn’t know what to look for when switching pension providers, which risks them making a decision which could lead to a poorer retirement outcome.

When asked what would influence their decision if choosing to move providers, more than a third of pension savers (36%) said saving money on charges would be a factor, 34 per cent would be swayed by the rate of return promoted by the pension fund, and more than one in 10 (12%) would consider moving to a company with a better website or app.

Following the recent launch of the Government’s consultation of the draft Pension Dashboards Regulations³, B&CE believes that the Value For Money Framework⁴, currently in development by the FCA and TPR, should be included on pension dashboards to ensure savers have transparent and comparable information before making a decision. It is also calling for the new VFM regulations to be applied to the retail market as well as workplace pensions, following research from The Pensions Policy Institute (PPI) which found a significant charging gap between members of uncapped retail schemes and capped master trusts⁵.

Commenting on the research findings, Phil Brown, director of policy at B&CE, provider of The People’s Pension, said:

“The Government’s recent announcement detailing further regulations for pension dashboards will allow the industry to take the next big step towards making this hugely important innovation a reality. Our research shows that seeing all their pensions in one place may make it more likely for savers to transfer their savings to one provider, but they have little idea of what to look for to make the best decision for them.

“It’s vital for the FCA and TPR’s Value For Money framework to be clearly displayed on the platform, otherwise savers will not know for sure what’s the right move for them. Pension dashboards have the potential to revolutionise pension saving but this will only happen if consumers are provided with complete transparency.”

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Note to editors

The People’s Pension is a leading workplace pension scheme from B&CE, serving more than five million pension savers across the UK, with over £17 billion assets under management. With no shareholders, it uses its profits to help people build financial foundations for life.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2104 adults. Fieldwork was undertaken between 7th – 10th January 2022. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Pensions dashboards: consultation on the draft Pensions Dashboards Regulations 2022 – GOV.UK (www.gov.uk)
https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2021-press-releases/fca-and-tpr-outline-a-framework-for-value-for-money-in-defined-contribution-pension-schemes
https://peoplespartnership.co.uk/downloads/20211123-ppi-uncapped-press-release/

A review of pensions policy in 2021

Many of the policy changes discussed in 2021, like pensions dashboards, will be difficult to accomplish but will bring real improvements for savers. We have more questions about other initiatives, but have no doubt the Department for Work and Pensions (DWP) is trying to improve the UK pension system.

Pensions dashboards

Big projects, like the pensions dashboards have seen major progress this year. The main contracts for the systems that will make the dashboards work have been issued by the Money and Pensions Service and they are progressing towards staging schemes on dashboards from early 2023.

Most of the legal and regulatory rules that will underpin how dashboards work have yet to be published, so there is still much to do. Similarly, we haven’t seen the application programming interface (API) that will be used to link together pension scheme member databases and the dashboards information architecture. It’s imperative that schemes get confirmation on the final requirements as soon as possible so that preparation can begin in earnest.

Small pots

In late 2020, the DWP working group produced a report recommending that the industry look at the policy and administrative issues around automatic consolidation of small pots. So, this year there has been further investigation into the small pots issue. And now following a report by the Pensions and Lifetime Savings Association (PLSA) and the Association of British Insurers (ABI) working group, there is a need for further action by policymakers. It is likely we will need legal and potential primary legislation to make small pot consolidation a reality. We hope that both the government and the industry will return to the table in 2022.

Communications and engagement

We now have final regulations for the simpler annual benefit statement.

The statement is now a known quantity. For most people, it’ll be a clear and standard-comparable document. For some (potentially those with more than one job or a protected pension age) it may look different, but not significantly so.

Investments

On investments, we have seen a renewed focus on investing in illiquid assets. Much of the government views rapidly growing DC funds as an easy source of capital for national economic priorities.

Measures like changing the charge cap are being suggested, which we see as ineffective. But other measures, like a new fund structure, are more likely to enable greater diversification in how DC funds invest. Broadly, we see investment in unlisted assets as potentially desirable given the large body of work showing an illiquidity premium for the schemes capable of capturing it.

The market for workplace DC is, however, very price-sensitive. Investing in unlisted assets is typically much more expensive than investing passively in listed equities and changing scheme asset allocations to invest in unlisted assets would most likely pass through to member charges.

Value for money

Which brings us to The Pensions Regulator and the Financial Conduct Authority framework for value for money. Making the workplace pension conversation about value, rather than just charges, is a sensible aim. Initially, the regulators’ value-for-money framework is intended to help pension professionals assess value, but, in time, we expect metrics to be developed that are consumer facing.

Our view is evolving. The focus on the proposed framework consultation paper in judging the quality of scheme oversight, investment and costs and charges is mainly right. The Pensions Policy Institute’s recent piece on the global experience of value for money also highlighted the importance of governance as a theme. It’s something we hope both regulators will return to.

So, while we expect 2022 to be equally busy, the hope is that policymakers keep the bigger picture in mind.

Tim Gosling, head of pensions policy at B&CE, provider of The People’s Pension

information

This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

The People’s Pension responds to the Queen’s Speech

Responding to the Queen’s Speech, Gregg McClymont, director of policy at The People’s Pension, said:

“It’s good to see the return of the Pensions Schemes Bill mentioned in today’s Queen’s Speech. But, to make the pensions dashboard a success, it’s vital that savers can see all their pension information – including the State Pension and public pensions – in one place.

“And if the Government is intent on delivering multiple dashboards, a number of measures are necessary to gain the public’s confidence. Total coverage is crucial; charges must be included from the outset to achieve transparency; and tough consumer protection measures are needed to ensure savers’ best interests are always put first.”

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Government commitment to pension finder service

Government commitment to pension finder service but warns private sector dashboards must operate under legal duty to users.

The People’s Pension welcomes Government commitment to pension finder service but warns private sector dashboards must operate under legal duty to users.

Commenting on the government response to the pensions dashboard consultation, Gregg McClymont, director of policy at The People’s Pension, said:

“We welcome the government’s commitment to a single pension finder service that’s free from commercial interest, and support the decision to ensure the information presented and displayed by the public dashboard will be mirrored on any commercial dashboards in the initial phase. This will help savers answer the question our members often ask; ‘what savings have I got and where are they?’.

“A legal duty on all private sector dashboard operators to act in the best interests of savers will be necessary if and when a future government allows commercial dashboards to diverge significantly from the public dashboard model. This is key for consumer protection.

“When four in ten people are unaware that their pension provider may charge them for managing their pension, we urge the government to include pension charges from the outset. It will only be successful if a saver can see their full pensions picture – all pensions and what charges they pay – in one place.”

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Notes to editors:

The People’s Pension is one of the largest master trusts (multi-employer pension scheme) in the UK, with more than 4 million members, 80,000 employers and £6bn assets under management (accurate at 4 April 2019). We tweet as @peoplespension.

Read our report ‘Delivering pensions dashboards in the public interest’ written by consumer champion Dominic Lindley.

Provider calls for legal duty to be placed on dashboards

Leading automatic-enrolment pension provider calls for legal duty to be placed on pensions dashboards, as new report warns savers could be put at risk

The People’s Pension¹ is calling for a legal duty to be placed on commercial pensions dashboards to put savers interests first, as a new report warns they could be put at risk without it.

As the government consults the industry on the next steps for the pensions dashboards project, Delivering pensions dashboards in the public interest, commissioned by The People’s Pension and written by consumer champion Dominic Lindley² , emphasises the need for strong consumer protections when dashboards move from a single non-commercial version to multiple commercial ventures.

In the wake of the report, which sets out a long-term vision on how pensions dashboards can help people manage their finances more effectively, The People’s Pension is calling for a package of measures to ensure savers interests are put first.

These are:

A new legal duty, akin to a fiduciary duty, on dashboard operators to prioritise the interests of savers, overseen by The Pensions Regulator (TPR)³

Giving consumers the legal right to all their financial data, enabling individuals to see a total picture of their finances across pensions, banking, investments, and insurance

Pensions charges disclosed on the dashboard from day one to ensure full transparency

The government to create a statutory body to oversee pensions dashboards in the long-term, with the power to set standards and a clear statutory remit to act in the best interest of consumers

Commenting, Gregg McClymont, director of policy for The People’s Pension, said:

“Government figures suggest that a huge number of people, up to 18 million, could eventually access pensions dashboards. The opportunities are vast but so is the potential for consumer detriment.

“The Port Talbot steel worker’s pension scandal shows how easily things can go wrong. The strongest form of consumer protection is fiduciary law, so we’re calling on the Government to pass legislation to place such a legal duty on all dashboards operators.

“We’re also calling for pensions charges to be disclosed on dashboards from the outset, for consumers to have a clear legal right to all their financial data, and for the creation of a Pensions Dashboards Authority armed with a clear statutory remit to act in the best interest of consumers. This package of measures can strengthen the governance of pensions dashboards in the public’s interest.”

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Notes to Editors

The People’s Pension is a leading, not-for-profit master trust (multi-employer pension scheme), provided by B&CE, with more than four million members from more than 80,000 employers across the UK, and £5bn assets under management (accurate at 28 January 2019). We tweet as @peoplespension.
Dominic Lindley is an independent consultant specialising in financial services, consumer protection and conduct risk issues. He is a member of the Financial Services Consumer Panel and Director of Policy for New City Agenda, a thinktank and forum founded by Lord McFall, Lord Sharkey and David David MP.
Statutory legal duties of this type, to act in the interests of pension scheme members already exist, notably in the 2005 investment regulations. The 2005 regulations specify that occupational pensions should be invested in the best interests of members and, in the case of a conflict of interest, in the sole interests of members. Most of the funded pensions assets (about 75 per cent) to be shown on the pensions dashboard are managed under this sort of regime. Only a minority of contract-based pensions are regulated under different arrangements. The 2005 investment regulations specify the assets must be invested—

(a) in the best interests of members and beneficiaries; and

(b) in the case of a potential conflict of interest, in the sole interest of members and beneficiaries.

http://legislation.gov.uk/uksi/2005/3378/regulation/4/made

Pension Dashboards Consultation

The People’s Pension respond to Dashboard Feasibility plan

The People’s Pension respond to Dashboard Feasibility Study

B&CE, provider of The People’s Pension, respond to Dashboard Feasibility Study

Commenting on the Pensions Dashboard Feasibility Study, Gregg McClymont, Director of Policy for B&CE, provider of The People’s Pension, said:

“I applaud Government for recognising that such a complex and sensitive project as Pensions Dashboard project can’t be handed over to the private sector to run. Putting the Single Financial Guidance Body in charge, as we’ve long-called for, is in the public interest and a welcome proposal. The emphasis on building a non- commercial dashboard initially, is crucial if the major benefit which dashboard offers – a single register that allows savers to see all their pensions in one place – is to be realised. That’s the big prize, rather than a commercial tool for providers to market their services.

“For the dashboard to become that one-stop shop that savers need it to be, it’s vital that the state pension and public pensions are included as well as workplace and retail entitlements.”

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Notes to Editors

The People’s Pension is a leading and not-for-profit master trust (multi-employer pension scheme) in the UK, with more than 4 million members from more than 80,000 employers, and £5bn Assets Under Management (accurate at 3 December 2018). We tweet as @peoplespension.

The People’s Pension calls for body to lead on dashboard

The People’s Pension calls for Single Financial Guidance Body to take lead on pensions dashboard

Responding to the government announcement on the Pensions Dashboard, Gregg McClymont, director of policy at The People’s Pension, said:

“Without the government’s lead on the pensions dashboard, it cannot become the one-stop shop that people need it to be. The state pension and public pensions are unlikely to be included, and unless the dashboard is backed up by legislation, savers won’t be able to see all their pots in one place as many providers simply won’t play ball. The point of it will be lost.

“The People’s Pension alone, with a membership of four million people, has more than three hundred and fifty thousand members who’ve not provided us with a current address – that’s hundreds of thousands of people at risk of losing their pension pot. Although we work hard to trace them, a dashboard, where they can see all their pensions in one place – is needed to help them keep track of all their hard-earned savings and provide them with the information they need to make vital decisions about their financial future.

“The advantages for savers are clear and most importantly it’s what people across the UK want with seven in ten backing the dashboard¹. If the government is determined to hand over responsibility, then the Single Financial Guidance Body is the obvious home to ensure accuracy of data and governance.”

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Notes to Editors:

The People’s Pension found that:

One in five respondents (22%) have lost track of a pension
Six out of ten UK workers with a private or workplace pension scheme (60%) don’t know where the details of all their pensions are.
Nearly a third of respondents (29%) don’t know who their current workplace pension is with.

Dashboard has real potential to revolutionise retirement

Pensions Dashboard has real potential to revolutionise retirement – comment from The People’s Pension

Responding to reports that Esther McVey is planning to “kill off” the Pensions Dashboard, Andy Tarrant, Head of Policy at The People’s Pension, said:

“At a time when 14 million people are at risk of not having enough to live on when they retire, it’s astonishing that an initiative aimed at helping millions of people to live comfortably in retirement, could be seen as a distraction by government.

“The government should be doing everything possible to help people plan ahead. With one in five people across the UK having lost track of a pension, the dashboard will help ensure people keep track of all their savings, have all the information needed to make the important decisions about their financial future, and will allow them to watch all their retirement savings grow and compound over time, helping them to understand what their retirement might look like.

“More than seven in ten people 1 have told The People’s Pension that they want to be able to see all of their pensions in one place. The dashboard has real potential to revolutionise retirement planning for millions of people across the UK and we urge the government not to u-turn on their previously strong support for the initiative.”

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Notes to Editors

The People’s Pension is a leading master trust (multi-employer pension scheme), provided by not-for-profit organisation B&CE, serving almost 4 million members and more than 80,000 employers across the UK (accurate as of 17 July 2018). Follow @peoplespension on Twitter.

Lost pension pots

As the ‘job for life’ is a thing of the past, The People’s Pension were curious to learn how much people are aware of their pension savings and how they keep track of their pensions as they move from job to job.

The research

On behalf of The People’s Pension, YouGov carried out an online survey with 2,297 UK adults in employment aged 18 to 66, between 16 and 20 February 2018.

Findings

The research reveals that, one in five people have lost track of a pension and that nearly half (47%) don’t know how much their retirement savings are worth. Three out of five adults don’t know where all the details are of their pension savings while two in five don’t know they pay charges on any of their pensions.

Outcome

This research highlights how the pension industry could be doing a better job at helping people understand how much all their retirement savings are worth. Educating people that they can move their pensions between pension providers is one way they can keep track of them, especially when 46% of people said they would be encouraged to do this if it meant it was easier to manage their pension savings in one place, but two out of five are unaware they can do this.

The findings also echo calls from cross-party MPs for a single dashboard to allow savers to view their pensions – state, defined contribution and defined benefit – in one place. Anything other than this would leave savers confused and only able to see part of their full pension picture.

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