Keeping track of your pensions savings can be difficult. Unless you have stayed with one company for your whole career, you are likely to have several pension pots scattered around by the time retirement nears. On average, we have 11 employers over our working life, which means almost a dozen pension plans by the time we retire.
Things could be even more complicated if you have taken out a private plan or two along the way. If you are methodical, you may have a dog-eared folder with the details of each one, and the latest statement from each one. Most of us are simply not that organised, even with something as vital as our pensions, it’s easy to lose track of things we have done 30 or 40 years ago. Research suggests that over a third of people approaching retirement admit they find it difficult to keep track of their pension pots. There’s always the nagging doubt – did I have a pension with that job I left after six months? Are there several thousands of my pension savings waiting to be claimed?
The government has been insisting that it supports saving for a pension, and it has launched a new initiative to help – the pensions dashboard.
What is the Pensions Dashboard?
Most of us are comfortable with the idea that the internet is full of data about us. Some of us, when retirement is approaching will feel confident enough to use the internet to hunt down those half forgotten pensions.
It will of course be a long and frustrating process, even if you are keyboard wizard.
The pensions dashboard provides a solution. It is a platform that lets savers see all their pension pots in one place.
Not only will the pensions dashboard let you see what is happening in your main pension pot, and hopefully show how much your savings are growing, it could help you boost your final sum by providing a link to “lost” pension pots with previous employers.
It could help you release your share of the £400 million worth of pensions savings that the Department for Work and Pension believe are currently unclaimed.
Even more important, it could eliminate the nasty surprise waiting for many people close to retirement when they discover their pot is smaller than they imagined, and that their retirement could be a lot less comfortable than they had hoped. Keeping an eye on how things are going well in advance could give you time to take action to get them back on track.
Too good to be true?
Technology and the internet have already made banking simpler. We go to our laptop or even mobile phone rather than dash down to a branch of our bank. We expect to see our statements online, and in theory, the pensions dashboard will be little different from looking at our online savings accounts.
However, things may not be quite that simple. Accessing pension policy data in real time from across all the pension administration systems across the country is no easy task, from a technical or security viewpoint.
The Pensions Dashboard was first announced in the 2016 budget as part of the government’s wider strategy to help people to engage with their pensions earlier. Many of the UK pension providers are fully committed to overcoming the problems, and are collaborating to provide a working prototype.
This was scheduled to be unveiled by March 2017, and a prototype has already been delivered. However, some challenges remain. The larger providers are finding ways to link to the system, but closed-book providers operating on outdated back-office technology systems present problems. Legislation may be necessary to get them to participate.
What is happening?
A complete working dashboard is still some way off. It is unlikely any of us will be able to log in and see our pensions until at least 2019. By then there may be several dashboards, from several suppliers, all providing similar information.
Whether they can find all your legacy savings remains to be seen.
In the meantime, it is possible to search for lost pensions. The government has a free pensions search service. This can be a vital first step to making the most of your retirement plans.
If you would like help with any aspect of your pension planning, the solution is simple. Call us at Continuum.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.