Which? is calling for the urgent introduction of a comprehensive pensions dashboard after an investigation exposed how the current system leaves workers struggling to track down and understand their retirement pots.
The consumer champion challenged 12 volunteers to track down key pieces of information about each of their 38 pension schemes, to see what difficulties they faced.
Of the volunteers, nine (75%) encountered gaps in their data, while only three (25%) were able to find all the requested information via paper statements, online accounts and phone calls.
Some volunteers struggled to find the value of their pension or projected entitlement under a defined benefit scheme. One was told by their provider that they had to wait 40 working days – almost two months – for a new statement to give the information.
Several participants discovered worrying errors. Among the top concerns consumers had was missing information – particularly when it came to pension charges and investment strategy, with some unable to find anything at all about either.
Which? also found that even where information was available, it wasn’t always correct.
One participant, 36, from London, had a shock when she started looking at her pension with her last employer, a US-based marketing agency using a UK payroll provider.
For a period of eight months, pension payments had been deducted from her salary, but neither this money nor any company contributions had found their way into her pension account – potentially breaking the law through non-payment of contributions.
Other volunteers found that pension company mergers and takeovers can add to the sense of confusion, with one having historic correspondence from three different providers for the same scheme. This was after her pension company was first taken over by another provider and then her employer switched its nominated firm.
The new research comes as Parliament today (Thursday, 27 February) debates the Pension Schemes Bill, which legislates for the introduction of a pensions dashboard.
In a separate survey, Which? asked more than 300 members across the UK whether they would use a pensions dashboard to manage their retirement and what they most wanted to see included in it.
More than three quarters (77%) said they would be likely to use the dashboard to find out about their pensions.
Among the top requests for inclusion on the dashboard was an update on the state pension, with nearly three quarters (74%) wanting to know how much they’d get at state pension age.
Almost two thirds (62%) were keen to have a projection of their future retirement income, while more than half (55%) wanted to know their current pension value and a similar number (54%) wanted to see charges.
Which? has long called for the introduction of a pensions dashboard to ensure that savers can see all their pensions in one place.
The consumer champion has pressed the government to ensure that a dashboard provides people with relevant information about all of their pension pots in one place – including the state pension. The dashboard must also publish key information such as charges and income projection figures, to ensure savers are equipped with the information they need to plan for their future.
The pensions dashboard project was first announced in the 2016 Budget and the government originally promised to ensure that it was designed, funded and launched by 2019. But a prototype version won’t probably be available until 2021 at the earliest.
Gareth Shaw, Head of Money at Which?, said:
“A pensions dashboard could be a game changer for consumers who have struggled for too long with a complex, fragmented pensions system.
“For the millions of pension savers to get genuine benefit from a dashboard, the government must use this opportunity to ensure that it delivers all the information consumers need to see including their charges, income projection figures and state pension entitlement.”
Which?’s Pensions Planner checklist:
Get to grips with the basics: ask for an up-to-date statement if you haven’t had one in a while and make sure any online log-ins still work.
Update your details: if you haven’t updated your address since moving, your pension statements may end up with someone else.
Nominate a beneficiary: after your death, most pension schemes will allow anyone to inherit your pension.
Find lost savings: the Pensions Tracing Service is a free service that searches a database of more than 200,000 workplace and personal pension schemes.