Like fusion power, the pensions dashboard is A Good Thing but is always several years in the future.
Who would not welcome a non-polluting source of cheap and almost limitless electricity? And who would not like to go online, see all the pensions they have ever paid into and find out how inadequate they all are?
Another week, report, another delay. It will now be October 2026 before all major pension providers have connected to the ‘digital architecture’, and an unknown date after that before anyone can marvel at what a meagre retirement they face.
The flag that the Good Ship PDP is flying is either Victor — I require assistance — or Zulu — I require a tug
The latest report, from the National Audit Office (NAO), sets out in forensic detail the huge and costly work that has gone into failing to produce the dashboard.
A competition to find a contractor to create the digital architecture attracted just one bid. CapGemini will be paid £44m for that job. Or rather, it won’t, because we all know an initial bid for a government infrastructure project — especially where there is just one bidder — always costs more. In this case, the overspend is formalised by an “option to extend” from five years to seven, implying a cost of around £62m.
The NAO revealed that what is now, following its own costly rebrand, called the Pensions Dashboards Programme (PDP) will have a total cost of more than £1bn. Pension firms will have to spend £688m connecting and uploading data even before each designs its own user interface.
The cost to the Money & Pensions Service (Maps) — an ‘arm’s length’ body of the Department for Work & Pensions (DWP) — has grown to £289m; paid by an industry levy.
I soon expect an announcement that PDP head office has been moved — to Shambles, York — and the final date for anyone to reconnect with their pensions is now the 12th of Never
When the dashboard is working, Maps told the NAO, the public will get financial benefits of £437m over 10 years based on an assessment of how much people would pay for such a service (they won’t have to as it will be free) and the value of lost pension pots recovered.
The NAO says the new figure from Maps is just 60% of the expected benefits. That implies 16.3 million users may gain £1bn over 10 years — just £6.33 per person per year. Compare that with the 2022 estimate by the Pensions Policy Institute (PPI) that 2.8 million pension pots were lost with a total value of £26.6bn, around £9,500 each.
The project may not even achieve that modest aim. In 2022, when it was assessed by the government’s own Infrastructure and Projects Authority, it was awarded a red delivery confidence rating after failing 12 out of 14 standards, which included demonstrating that the service was accessible and easy to use — surely its primary goal, along with being complete and accurate.
A 24-box flowchart graphically sets out the seven-year mismanagement of the PDP
The NAO report confirms it will never be complete. The 3,500 largest pension providers have a legal obligation to upload their data, but 29,000 smaller ones do not and they represent 0.3% of all scheme members. The most recent figures show 20.4 million people are paying in to a pension at work, which implies at least 61,000 current pensions will not be on the dashboard. Coverage of 99.7% is very good — unless you are among those left out.
Four big lessons
But at least all the delays and governance failures have achieved something. The DWP has learned four big lessons in how it interacts with arm’s-length bodies: “sufficient scrutiny and challenge”; considering “maturity and stability”; prioritising “adequate support”; and attending the “departmental change portfolio board”. Phew. I feared it would miss that last one.
A 24-box flowchart graphically sets out the seven-year mismanagement of the PDP. The next step, nearly a year after the last, will be in July when the programme board (the same board that, in February 2023, was found to not provide “sufficient scrutiny and challenge”) meets to discuss whether the project can move to the next stage — “voluntary onboarding and ongoing testing”.
Like fusion power, the pensions dashboard is A Good Thing but is always several years in the future
The NAO describes the PDP as one of the DWP’s flagship projects. But the flag that the Good Ship PDP is flying is either Victor — I require assistance — or Zulu — I require a tug. Last month it ran up Oscar — man overboard — when the person in charge, former PPI director Chris Curry, was summarily replaced by Iain Patterson, who has the title of senior responsible owner (who makes this stuff up?).
I soon expect an announcement that PDP head office has been moved — to Shambles, York — and the final date for anyone to reconnect with their pensions is now the 12th of Never.
Paul Lewis is a financial journalist and host of Radio 4’s Money Box
This article featured in the June 2024 edition of Money Marketing.
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And here it is folks.. just one small paragraph to pin point the reality that the pensions dashboard is wrong ..a mistake …a folly
“And who would not like to go online, see all the pensions they have ever paid into and find out how inadequate they all are?”
We read the other day the so called advice gap has left 12.4 million people without advice …
So here you have it a 12.4 million prospect list for the scammers the pension dashboard will provide the proof of the pound notes up for grabs
All the work done for them !!!
I am far from saying people should not have the information….But ?
The Dashboard is a typical government idea ~ so vast in scope, cost (to others, of course) and complexity that it’ll probably NEVER work properly.
It would have been better to start out as a very basic database that invites people to enquire further. For example, it might just comprise an alphabetical index of names, years of birth and last known town/city/ village of residence. Thus, if a Mr John Martin Smith, born in 1966, who once lived in Reading, Berkshire sees his name there and (vaguely) recalls that he or some past employer once contributed to some sort of pension plan, he has a pretty good idea that if that plan still exists and has some value, it’s via this portal that he has a fairly good chance of finding it. That’s all he needs to know at this stage.
The index need not include any details of providers or policy specifics, just an indication that there may be a provider or two out there that has something on its records relating to the John Martin Smith described above. From there, he can be put in touch with said provider/s via the dashboard and, subject to normal security filtering, investigations can begin.
Wouldn’t that be a very considerably better way of going about it than the mismanaged monster that the dashboard appears to have been so far?