Pensions dashboards are coming: what you need to know

From as early as the middle of next year, members of the public should be able to see just how much they’ve got saved for retirement online and in one place.

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The pensions dashboard has been bubbling away for years. The first formal proposal came from the Financial Conduct Authority (FCA) in 2014 – pointing to countries, including the Netherlands, which were already running successful pension portals.

The UK dashboard was announced by then chancellor George Osborne, in the 2016 Budget, with a target delivery date of 2019. But the initiative has been plagued with delays, with everything from rising costs and limited digital resources to ineffective governance blamed for the hold-ups.

Roll on seven years and it looks like the scheme will finally see the light of day. By 31 October, all pension providers must have connected to the dashboard that’s being created by the government-backed Money and Pension Service (MaPS) – only schemes with less than 100 members will be exempt.

And it looks like providers are on track. According to the Department for Work and Pensions (DWP), 85% of schemes were connected in July.

Once that stage has completed and the DWP is confident that enough of the records users need will be available, a launch date will be announced.

With a fair wind, that could mean that a formal launch for mid-2027 is announced before the end of this year. The government says it will provide six months’ notice before the dashboard goes live.

What will the dashboards do?

The idea is that we’ll all be able to log on to the pensions dashboard and see how much we have saved towards retirement in all of our various workplace and personal pensions.

It will also show what we’ll be entitled to from the state pension and when - assuming you keep up with national insurance contributions (NIC).

The dashboard will provide an estimate of your total retirement income, showing how much income your pots could collectively deliver each month (or year) once you’ve retired.

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You’ll also be able to see which company each individual pot is with, how much it’s worth and when you’ll be able to start claiming it. If it’s a workplace scheme, you’ll be able to see which employer it’s linked to as well.

The first dashboard will be delivered via MoneyHelper – the consumer face of MaPS.

To log on, users will need to complete an ID verification process. The service will then use individuals’ personal information to match them to their relevant accounts.

In years to come, it’s expected that other private sector organisations – including pension providers, banks and employers – could access the same data and develop their own rival pension dashboards (so long as they meet government criteria).

How the dashboard will help savers

The dashboard will represent a massive achievement. For the first time savers will be able to see all their pensions with just one log in.

In addition to the pensions you know about, it will also show pensions that you may have forgotten about or “lost” over the years.

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Estimates suggest there are around 3.3 million lost pensions, with an average value of £9,500 each.

This should make it much easier for savers to see whether their pensions are on track to deliver a comfortable income when they do eventually retire.

Will it deliver?

The big question, of course, is will the pension dashboard deliver?

Gathering records from 1,800 pension providers for more than 70 million workplace and personal pots, along with tens of millions forecasts for the state pension, is no mean feat.

But the delays and setbacks over the years might not inspire confidence.

The MaPS has itself warned that some pension providers may require extra time to calculate pensions’ values, once they’ve been requested, which could be as much as 10 working days.

There may also be questions over the pension values you’re presented with.

One reporter at The Telegraph recently got to test-drive the pensions dashboard as it currently stands and discovered some of his pensions looked a lot lighter than they should – with some providers updating balances more frequently than others.

Unless you’re regularly checking balances with your provider directly – and already have a fair idea of your pots’ value – that could cause confusion.

It’s also important to be aware that the dashboard won’t have any functionality beyond the information it’s sharing. You won’t be able to use it to manage your pensions or make changes – you’ll need to contact your provider or log on to individual accounts to do that.

So, while the dashboard should – hopefully – make it easier for you to view your savings, the onus will still be on savers to spot any shortfalls and make changes.

That means to achieve its full potential, it will need to be supported with pensions education.

Getting a head start

You also don’t need to wait until the dashboard launches – whether that’s next year or the year after – to get a better view of your retirement saving.

In fact there’s a strong argument for finding out where you stand now, if you’ve got lots of scattered pensions that you don’t regularly check.

The sooner you know what your position is, the more time you’ve got to make meaningful changes.

And that could be particularly important if you think one of those 3.3 million lost pots might belong to you.

Once the pensions dashboard does eventually go live, and savers are alerted to long forgotten pots, pension providers could be inundated with requests to transfer pots.

If you think you might have lost a pension – perhaps because you didn’t update your address when you last moved house - it should be reasonably easy to find, even without the aid of the pensions dashboard.

Going through old paperwork, contacting former employers, even old colleagues, could help you track down a lost scheme or give you the clues you need to find it.

You can also make use of the government’s free pension tracing service – this won’t confirm you have a lost pension or tell you it’s value, but it will give you the relevant contact details so you can make enquiries yourself.

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It will help if you’ve got certain information to hand including your national insurance (NI) number, previous names and addresses, as well as the dates you worked with the employer.

If there’s a match, you can then be reunited with your pot by ensuring the provider has up-to-date address details for you.

But if this is one of multiple pensions you have, it may make sense to transfer it – potentially along with other schemes you’re no longer contributing to, into one personal pension, such as a self-invested personal pension (SIPP).

Dashboard or no dashboard, the fewer the pensions you have, the easier they will be to manage and keep track of.

By combining old pots into a SIPP, you’ll also benefit from better investment choice (you can choose your own funds or pick ready-made portfolios) and often lower fees, meaning you get to keep more of your investment returns.

Then, in the future, each time you change job and get a new workplace pension, you can transfer the scheme you’ve just stopped contributing to into your pot.

But before you do combine any pensions, check whether you’ll lose any valuable benefits like guaranteed annuity rates, a lower pension age or more tax-free cash first (more likely on older schemes).

Also bear in mind that while it’s straightforward to transfer defined contribution (DC) pensions, there’s a different discussion for defined benefit (DB) schemes, if they can be transferred at all (unfunded public sector schemes like the NHS or Teachers pensions can’t be moved).

Even if your scheme permits transfers, you’ll also have to seek independent advice first if your pot is worth more than £30,000. That’s because you would give up your right to guaranteed income and have to take responsibility for managing the pension yourself.