As George Osborne’s 2019 dashboard deadline looms, the final destination for the government’s pension project remains unknown.
One of George Osborne’s last pension legacies as chancellor was his announcement in 2016 that the government will have a pensions dashboard up and running by 2019.
But in the halls of the department for work and pensions (DWP), there is probably a hint of resentment over this self-imposed deadline.
With only months until the project is supposed to be up and running, the government is still grappling with some of the most fundamental aspects of how it will actually work. As a result, the project’s development is being delayed.
As New Model Adviser® reported last month, the DWP has already delayed its feasibility study for the project, which the department said would be published by the end of March.
This study is now expected in the ‘spring’, even though it is now May. It is likely to provide an analysis of how much the government expects the project will cost and where the money will come from.
One or multiple dashboards?
It will also likely say whether the dashboard will only be available to the public on a page on the new single financial guidance body (SFGB) website. Alternatively, insurers and banks may be able to create their own dashboards to display on their websites.
This decision is critical to the success or failure of the whole project. Judging by the lack of announcements coming from Whitehall, it is likely to be causing a lot of headaches for civil servants and ministers.
The argument for a single dashboard on the new guidance body website is this: it would give the government a project it could easily take credit for. ‘Just check our guidance website to see all your pensions in one place’ the DWP website would read.
It would also be very easy to regulate. It would be the government supplying its own user interface for data, which it would mandate providers and pension schemes to provide it.
This single model is favoured by consumer bodies. It was also the model supported by MPs on the influential work and pensions committee in its pension freedoms report.
‘The case for a publicly hosted pensions dashboard is clear cut,’ concluded the MPs. ‘Consumers want simple, impartial, and trustworthy information. Armed with such information, they will be empowered to exercise choice in the decumulation product market, driving competition and consumer benefit.’
It added: ‘The case for multiple dashboards hosted by self-interested providers is far less convincing. This would add complexity to a problem crying out for simplicity.’
The argument against multiple provider-made dashboards is this would create a regulatory headache. There would have to be a regulator overseeing how they were presenting the public with data about their pensions. It would also have to ensure no one was setting up dodgy dashboards to scam consumers out of their pensions.
But the multiple dashboard model has strong support from insurers. Aviva, Royal London and LV= all want to create their own dashboards.
It is widely understood the Treasury favoured multiple dashboards, while the DWP, which formally took over the project last October, favours the single model.
Choosing the single dashboard route risks a clash with providers.
Providers may drag their feet over supplying data for the dashboard until the government introduces legislation to mandate it. The government has suggested legislation will happen, but it is not clear when. This further puts the 2019 launch date in jeopardy.
It will also mean providers might resist being forced to provide financial support for the project’s costs. But that would mean the government has to use taxpayers’ money rather than levies on pension providers.
The hard decisions the DWP faces are making Osborne’s 2019 deadline increasingly unlikely.
Whitehall is torn over which route to go down. So much for a dashboard. It is more like a fast-approaching crossroads.