What the new pensions dashboard will mean for you

Pensions are one of the main sources of income for most people in retirement—yet for many people it is difficult to work out how much to save, or how much of their pension they should draw on when they stop work.

A new initiative by the government should make the process of saving for retirement, and budgeting while in retirement, much easier.

The new Pensions Dashboard, which could be launched this year, should in time list all your workplace, employer or private schemes in a single online site. The government’s says the State Pension will also be included in the overview, although not initially.

Most workplace and private pensions should be included in the dashboard, so that you will be able to see all your pensions funds in a single list. This would include final salary schemes (known as Defined Benefit), most investment-based schemes (known as Defined Contribution), all your private pensions and eventually, any State Pension you can claim.

The government has just finished consulting with the financial services industry, pension companies, and consumer groups on how the Pensions Dashboard might work, and it will publish a report later this year. Here are some of the proposals: 

The service will be available through advice services, banks and employers and there will be a number of different ways to view your plans.

You’ll need to provide details about your name, address and National Insurance number, and the Pensions Dashboard will search for and collate information about pension pots that match your details.  It should provide the values and estimate of pension income that you are entitled to.

Financial companies hope it will spur people into saving more, contributing more to their pension, managing their money better once they have retired, and considering taking financial advice to help them with their long-term cashflow in retirement.

Many experts in the financial services industry have voiced concerns that unless the service is compulsory for all companies to join, it won’t be useful to consumers. The time and cost involved will mean that the government will probably have to force pension companies to join up.

This will cause a headache for companies with old databases and old legacy systems. If your pension company has invested in new technology it might be one of the first to sign up, but there is no guarantee. If your pension provider has an older system, it may be some time before it is included in the dashboard.

New research by wealth management group Tilney has found that nearly 1 in 5 people have lost track of a pension at some point.

If you have moved around a lot and changed employers, or if your pension company merged or was taken over, you may have lost the details of some of your old pension schemes.

The Pensions Dashboard should simplify the process of searching for old and closed schemes. It should also help you to view your pension savings as a whole so you can budget for the future.

Then there is the question of security—it will be vitally important that all the information is kept secure. Criminals and cold callers practising scams would love to get their hands on all your personal information. Extra layers of security and protection will need to be built into the system.

The Pensions Dashboard may encourage people to make extra contributions into their pension if they can see that the income they might receive in retirement might be insufficient for their needs. It may also encourage people to consolidate their pension pots so that they can keep track of them more easily.

The government’s Pensions Tracing Service can help you find old schemes that you may not have the contact details for: 

Pension Tracing Service
Telephone: 0800 731 0193
From outside the UK: +44 (0)191 215 4491
gov.uk/find-pension-contact-details

To help you track down merged or closed funds, there is an online Register of Consolidations at abi.org.uk This site can help you find out which company is now responsible for pension schemes which have been transferred to different firms.

If you want to find out more about your State Pension you can check it here: gov.uk/check-state-pension Don’t forget to tell your pension company if you move house so that they can continue to send you updates of your plan.