The National Audit Office (NAO), recently
released a report attributing the delays in the Pensions Dashboard Programme (PDP) to lack of digital skills and incapacity.
This is a serious drawback to the progress in digital pensions. However, it does answer some of the questions those reliant on the programme have been asking for the past year.
It leaves us wondering what will happen to digital pensions going forward and whether, given this drawback, they will ever reach their full potential.
What are pension dashboards?
The thinking behind the PDP is to allow individuals to have all the information about their pensions in one place. The thinking is this will allow people to plan better for retirement and connect them with any ‘lost’ pension pots.
In the UK, most employees are automatically enrolled onto some form of pension scheme. Meaning that by the time they get to retirement, they can have a range of different pensions in their name, some of which are difficult to track down.
Research from the Centre for Economics and Business Research has found that current 18-year-old are forecast to have an average of five pension pots by the time they reach the retirement
age of 68. Some workers can accrue over 20 different pots. This means there has been a need to increase the amount of data sharing between pension providers and users to ensure this is not being lost.
In the 2016 budget the government stated that it would ensure the industry designs, funds, and launches a pensions dashboard by 2019. This goal was not met.
In 2019 the Department for Work and Pensions (DWP) made the Money and Pension’s Service (MaPS) responsible for the delivery of pensions dashboards. MaPS then set up the PDP.
Initially, the pension schemes need to be connected to the digital architecture. There were 23 different deadlines for connecting to the dashboards, with the last one being 31st October 2025. After delays, this was amended to a singular deadline of 31st
October 2026.
Currently it has not been announced when pension dashboards will be available to the public, but due to delays it can be assumed this will be later than originally hoped.
Why has the PDP been delayed?
The NAO’s report found that from the beginning, the technical complexity and the capacity required for the programme were underestimated. Additionally, there were issues in recruitment and retention.
Beyond this, the programme struggled with management and governance. It said: “There was little evidence that the programme board was providing sufficient scrutiny and challenge.”
In February 2023, DWP conducted a review on the progress of PDP and it was given a red rating, meaning delivery was unlikely. The digital architecture did not meet several of the components required by the Cabinet Office, Central Digital and Data Office,
and broader government data protection and security standards.
The report stated: “The PDP had been unprepared for the level of technical complexity involved in the programme. The review found that, as a relatively new organisation, MaPS had focused on establishing itself and, without the necessary digital and change
capabilities, it had taken some time before it recognised delivery issues.”
As a result of these findings, it was
announced in March 2023 that there would be a delay in the delivery of dashboards while the programme was reset.
The NAO’s report highlighted the estimated cost of PDP has increased by 23% increased from £235 million in 2020 to £289 million in 2023.
Next steps for digital pension
The programme is now well on its way through the reset and working towards meeting the revised timeline. The DWP reports that connection testing will begin in August 2024, with wide onboarding of pension schemes and providers expected in April 2025.
Those close to the programme seem positive about its reset; Oliver Morley, CEO of MaPS said: “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.”
A Department for Work and Pensions spokesperson added: “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.”
Pension providers are maintaining a positive outlook that the programme will be able to deliver on its promises. Becky O’Connor, director of public affairs at PensionBee, commented: “The delays highlighted in the report underscore the importance of robust
scrutiny and ensuring that valuable lessons are learned if the programme is to move forward. The revised connection deadline of October 2026 presents a new milestone for the programme, and it is crucial that efforts are intensified to meet this target.”
Yet, some of those working on private dashboards have taken this as an indication that there is the need for commercial providers the opportunity to step in and deliver something quickly.
Mark Horwood-James, managing director, Moneyhub commented: “This gives providers the green light to step in and provide dashboard services using existing data sharing technology to meet the urgent demand of consumers to secure their financial futures. As
we have seen with Open Banking, it was the early adopters that got to drive the legislation and iterative priorities. It's great to see providers making great strides with this and the results are impressive.”
These findings highlight how important oversight is in the delivery of these important pieces of architecture. The reality is that with large projects like this, further delays are likely to occur. It is better to aim to create a product that works well
rather than a rushed job.
With that said, these delays should not undermine the importance of the programme.
Younger people have so much to consider with the cost of living crisis pulling on their resources, the thought of planning for retirement seems completely out of the question. However, pensions are there already and dashboards will give them the tools to
have better control over them.