If you have paid into several pensions over the years, it should be much easier to keep track of them in the future once the long-awaited pensions dashboard is introduced.
According to the Department for Work and Pensions, the average worker will build up 11 different pension pots over the course of their career. Keeping track of this number of pensions isn’t easy, especially if you’ve moved house a few times and haven’t let your providers know your new address.
As a result, around £26.6 billion is currently sitting in ‘lost’ pensions across the UK, according to the Pensions Policy Institute (PPI) and the Association of British Insurers (ABI). It is hoped that the pensions dashboard will help people find it easier to plan for retirement, as they’ll be able to see all their pensions in one place.
Here, we explain how the pensions dashboard will work, how it’s likely to help you, and when it’s likely to come into effect.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
What is the pensions dashboard?
The pensions dashboard was originally proposed by the then Conservative government back in 2016, with the aim that you’d be able to see all of your pensions on one online site. Both main parties have committed to its launch, and the Labour government is likely to include it in its forthcoming pension review. Emma Reynolds, the current pensions minister, has said that it is too early to confirm a launch date, with the Department for Work and Pensions previously saying that the launch date will only be announced once they are assured most pension schemes have connected and the dashboards are working well.
Here’s some of the information that’s likely to be included:
1) The income you may get from each of your pensions at retirement
This would be an estimate of your income based on various assumptions. The actual income you will get will of course depend on how you choose to generate an income from your retirement savings, as well as how much your pensions were worth at retirement. Find out more in our guide What are your pension options at retirement?
2) The value of your pensions at retirement
This would be an overall fund value if it was a pension ‘pot’ type of pension (known as a ‘defined contribution’ pension). If it was a salary-related pension (such as a final salary pension – or a ‘defined benefit’ pension) there is no pot as such as the pension scheme promises to pay a pension of a certain level per year. That means you may not get an overall figure but may just get a monthly income figure as described above.
Under current plans, the pensions dashboard would have to make some assumptions about how much your pension might grow in the future and what inflation might be, but it would not make any assumptions that you would continue to pay in more money.
3) How much your pensions are worth at the moment
This ‘current valuation’ may not be today’s value as the dashboard won’t generate any information itself, it will just take information provided by pension schemes. So, instead it will use the most recent valuation. It is possible therefore that the information produced by the pensions dashboard will be different to that from your most recent pension provider’s statement.
Will I be able to see information about all my pensions?
Hopefully yes, the Pensions Dashboard should allow you to view information about your private, workplace and state pensions online, in one place. The aim is that this will help people to plan better for retirement, as well as connecting them with ‘forgotten’ pension pots.
Under the current plans, the pensions dashboard will show you information about pensions that are an exact match for your name, date of birth and National Insurance number. There are plans that if a pension is found that matches two out of the three ID factors, such as your date of birth and National Insurance, but not the name, you could be told that there may be a pension for you with pension provider A, and you should contact them to find out more information. You’ll then be given contact details for pension provider A.
The pensions dashboard could also point you to the pensions tracing service to help you track down lost pensions.
It’s a bit more complicated for workplace pensions, especially if they are salary-related pension schemes. It’s quite likely that when the pensions dashboard eventually launches, a number of smaller company pension schemes won’t have signed up, as schemes with fewer than 100 relevant members aren’t obliged to sign up.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
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