Who am I?
Hello. My name is Richard Smith.
I’m a pensions professional, starting my career in 1987 (my LinkedIn profile has details).
Of the various things I’ve done in pensions, the thing I’m most proud of was working with the Department for Work and Pensions (DWP) to help set up Automatic Enrolment (AE) and the National Employment Savings Trust (NEST), now with over 4 million members and over £1 billion assets under management, and growing.
Why I’m a pensions dashboard supporter
Whilst with the DWP, I really began to understand how confusing and worrying most of the UK population finds the whole of topic of saving for retirement.
It would be great if people could feel much more confident about their plans for retirement. Confidence would help people stop worrying so much whether they’re saving enough for a comfortable retirement and when (or even whether) they’ll be able to retire.
Confidence comes from knowledge and understanding. In particular, understanding the retirement savings you’ve built up so far in your career to date. This is just what a pensions dashboard is for.
So I believe the whole arena of pensions in the UK will be much improved by a pensions dashboard, because of the greater understanding, confidence & engagement it will bring.
The Dutch experience supports this view. The Financial Conduct Authority (FCA) study into the UK retirement income market (Interim Report, December 2014), found that:
“Qualitative evidence indicates that the [Dutch] pensions dashboard has encouraged consumer engagement with pensions by making them more tangible and visible
Our findings indicate that the quality of information provided to consumers could significantly improve their engagement with the market and subsequent outcomes.”
Why I’ve set up dashboardideas.co.uk
Like many others, I’m a supporter of the concept of a pensions dashboard, but not at any price. The complexity & fragmented nature of the UK pensions system could make it virtually unfeasible, or at least very expensive, to develop a comprehensive facility.
The Blair Government previously tried to develop an Online Retirement Planner with a similar focus, but the project was scrapped in 2006 after four years’ development.
The HM Treasury-sponsored prototype dashboard, being delivered in March 2017 has brought up lots of options, each with different pros & cons, so I felt it might be helpful to create this website to support these debates.
By clearly airing the issues, I hope this site will help contribute to building consensus and help determine the best approaches for delivering the UK pensions dashboard by 2019.
Right now it’s a very busy time in pensions, so it might not seem the right time to develop and launch a pensions dashboard.
Automatic enrolment (AE) is being reviewed this year, and is still being rolled out to micro employers, with full 8% minimum contributions not coming into force until April 2019. The pension freedoms are only two years old, plus the new state pension arrangements have only been live for a year. The pensions industry has a lot on its plate.
The industry’s focus should not be distracted from continuing to successfully implement the above changes. As the former Minister for Pensions said in October 2015, “the market needs time and space to adjust to the reforms [currently] underway”.
However, since the 2016 Budget, the industry has been focussed on designing, funding and launching a dashboard by 2019.
My own personal view is that 2019 is a little early. It would be better to launch the full dashboard in October 2020 (with multiple pilots launched before that). By late 2020:
§ Automatic enrolment will have been fully rolled out
§ State Pension Age for men and women will have been fully equalised and increased to 66
§ HMRC’s new digital tax accounts will be fully up and running for all individuals.
Whether it’s 2019 or 2020, I know from experience helping set up AE and NEST that it takes time to settle the details of changes affecting a whole industry. The Pensions Commission’s Second Report (which recommended AE) was published at the end of November 2005 but it took nearly seven years before AE started to be implemented in October 2012, and a further seven years to roll it out (14 years in total!).
So now is the time to settle the detail of how the dashboard will be funded, governed, developed, launched and operated, in just two or three years’ time.
For many years, I’ve felt that if I could see all of my pensions in one place, and come back to this place often (not every day, but at least several times a year), then I’d feel much more confident about a) what I’ve already got and b) my saving plans for the future.
It seems instinctive to me that by being able to easily see the totality of their accumulated pension wealth, people will feel both more confident and more engaged to take an active role in their saving for their retirement.
But aside from my long-term general interest in this topic, there are three specific reasons why I believe I’m currently well-placed to support the pensions dashboard debate:
1. Experience: Establishing NEST broke new ground. None of us involved (whether civil servants or external consultants) had ever created, in statute, a national trust-based defined contribution pension scheme, with a public service obligation to accept all employers who wish to use it. And all under the glare of public & media scrutiny.
I would describe the process we adopted to develop the scheme as “collaborative innovation”. That is, the pooling of good ideas from a variety of sources, debating and refining them, and then packaging them appropriately for approval by Parliament, Ministers or other relevant authority.
A similar mix of collaboration and innovation across the whole pensions and technology community and Government will be essential to bring the pensions dashboard to fruition.
2. Age: I’m now 49, just past the classic age where “retirement reality” starts to kick in according to NFU Mutual’s 2013 research. So I’m personally in a position of thinking about what the pensions dashboard should look like and what I need it to do.
Plus, many of my friends and peers are of a similar age. Now that all our children are growing up, pensions issues are increasingly a part of our conversations, helping me gain a deeper understanding of the broader requirements for the dashboard.
3. Circumstances: Despite being only 49, I am already a pensioner. My lovely wife Heather very sadly died in June 2014. She worked for Prudential so I’m now a spouse pensioner of the Prudential Staff Pension Scheme. So I’m already starting to think like a pensioner, with a strong personal understanding of issues around life expectancy and death.
Many thanks for reading. Please do click Contact above if you’d like to get in touch.
16 March 2017