There have been delays to the proposed pensions dashboards programme (PA) (Image: PA Archive/PA Images)
The costs behind the pensions dashboards programme, a system designed to allow people to view all their pensions online, have surged by £54 million, according to a spending watchdog. The National Audit Office (NAO) has revealed that there is still no confirmed date for when this service will be available to the public.
The NAO attributed the delays in the pensions dashboards programme to a lack of digital skills and ineffective governance. The estimated cost of the programme has seen a 23 percent increase, from £235 million in 2020 to £289 million in 2023.
A “range of factors” has led to the estimated cost of the programme increasing by £54 million, the report stated. These include an increase in supplier costs, changes to the Money and Pensions Service’s (MaPS) underlying costing assumptions, and the period covered being extended by two years to 2031-32.
The previous estimate of £235 million had covered a 10-year period from 2019-20 to 2029-30, which included five years of live running. From April 2019 to March 2024, MaPS spent £59 million on the pensions dashboards programme.
Since 2019-20, the programme has been primarily funded through two industry levies that also fund MaPS’ other operations. These are the financial services industry levy, imposed on regulated financial institutions such as banks and building societies, and the general pensions levy, levied on occupational pension schemes.
The NAO reports that approximately 16.3 million people could reap the benefits of pension dashboards, which provide consolidated information about private, workplace, and state pensions.
However, as stated by the NAO: “DWP has not yet specified when pensions dashboards will become available to the public but, due to the later connection deadline, this is expected to be later than previously expected.”
These multi-pot overviews can help individuals plan for retirement, bridge any financial gaps, and locate “lost” pension savings estimated at a whopping £26.6 billion.
Pension schemes are mandated to link with the government’s digital architecture backing these dashboards by October 31, 2026 a year later than initially anticipated.
Originally, there were 23 different connection deadlines depending on the size and type of pension scheme. The preliminary deadline was August 31, 2023, while the last one was set for October 31, 2025.
In 2019, the responsibility for executing this programme was handed over to MaPS by the DWP, an entity operating at arm’s length.
However, at the onset, the DWP did not have a guarantee that MaPS possessed the necessary capacity and capability needed for such a significant digital initiative, mentioned the NAO.
Between 2020 and the middle of 2022, substantial progress regarding vital components of the pension dashboard system was achieved by DWP and MaPS, according to the NAO.
Yet, in December 2022, MaPS communicated to DWP that the delivery timetable was no longer feasible.
A review by the Department for Work and Pensions (DWP) last year pinpointed multiple factors behind the delivery issues of the pensions dashboards programme, including a scarcity of skilled digital resources and subpar programme governance. These concerns had been highlighted in previous assessments by the Infrastructure and Projects Authority, according to the National Audit Office (NAO).
The NAO has noted that the programme is undergoing a reset, with the DWP and the Money and Pensions Service (MaPS) making headway in certain areas.
In response to the lessons learned, the DWP and MaPS have begun implementing changes, updating programme governance structures and enhancing collaboration with arm’s-length bodies, the report detailed.
Gareth Davies, the NAO’s chief, commented: “Delivery delays due to shortfalls in digital capacity and capability have pushed back the final deadline for pension providers and schemes to connect to the PDP (pensions dashboards programme) by a year, with no date currently set for citizens to benefit.”
He added that despite advancements during the reset phase, it’s crucial for the DWP and MaPS to maintain close cooperation to ensure the smooth completion of the PDP’s final stages, enabling public access to this vital service.
Dame Meg Hillier, chair of the Public Accounts Committee (PAC), emphasised the importance of clear and straightforward pensions dashboards, stating: “Clear and simple pensions dashboards would help people properly understand their pensions preventing them from missing out on entitlements hidden in ‘lost pots’ and helping them plan for their future.”
“I am disappointed that the pensions dashboards programme has been delayed by a lack of skilled resources and ineffective governance problems we see again and again across government.”
“The Department for Work and Pensions must learn lessons from what happened on this programme and strengthen how it works with its arm’s-length bodies including the Money and Pensions Service.”
A DWP spokesperson noted: “As the NAO recognises, the pensions dashboards programme has made significant progress towards delivering a service which will transform how savers plan for their retirement.”
“Action taken by the DWP to reset the programme to get it on track for successful delivery means connection testing will begin from August 2024 before a wider onboarding of pension schemes and providers from April 2025.”
The CEO of MaPS, Oliver Morley, stated: “This report reflects the hard work of a dedicated team to inject real momentum into the dashboards programme, with support from the Money and Pensions Service, Department for Work and Pensions and wider stakeholder community.”
“We’re making sustained progress, delivering the information industry needs to be able to connect and so enable us to transform financial planning for generations to come.”
Becky O’Connor, the director of public affairs at PensionBee, commented: “Given the potential impact of the programme for millions of pension savers, it is important to have robust scrutiny and to ensure lessons are taken for the future.”
“The NAO report seems to draw a line under the reset, so all eyes will now be on getting to the staging guidance deadlines.”
Pete Glancy, head of policy at Scottish Widows, revealed that the value of pension assets in the UK surpasses £3 trillion.
He suggested that the dashboards will assist people in comparing the performance of their individual pension pots.
Mr Glancy stated: “All of this will make it easier for people to determine whether they need to save more, what their personal retirement journey might need to look like, and whether it is worthwhile consolidating pension pots which are performing poorly into pots that might offer better value for money.”
“In the longer term, we believe that pension dashboards will become a ‘national treasure’. However, this is a complex project, and whilst any delays or cost over-runs are always unwelcome, it’s important that the Government together with the pensions industry gets this right.”
