One of the biggest bug-bears that employees raise during the regular meetings we hold at client companies is the difficulty of tracking down and understanding the values of old pensions, be they employment related or personal plans, such as those used for contracting out of SERPS/S2P in the days when that was possible.
The current Pension Tracing service offered by Government is limited in scope and places the emphasis firmly back on the employee once a contact has been found (if, indeed, one can be found at all). And, unfortunately, finding the right service is difficult given the practice of predatory companies who try and hoodwink people into paying for a service that is otherwise free.
On average, people will have 11 jobs during their working lifetime and the advent of Workplace Pensions means, inevitably, they will also have 11 pensions. The problem is, therefore, not going to go away.
Cue the Pensions Dashboard.
On the drawing board for some time, the new Under Secretary Of State For Pensions And Financial Inclusion, Guy Opperman MP, has given the green light for a 2019 launch encouraging the pensions industry to get its act in order and start providing what people want.
In short, the Pensions Dashboard will provide a single access point for people to see all their pensions, including the State Pension, with up to date values. This will be a quantum leap forward from our current system and will, hopefully, give people not only a greater understanding of their financial situation but allow them to plan meaningfully for a decent retirement.
What the Dashboard will not do is give people the options about how and when they draw on their various pensions, nor will it deal with the tax aspects. People will still need advice on these not only at the point of “retirement” but also in advance so they can plan accordingly.
The Pensions Dashboard will not solve the problem of accessing these advice services so employers who already have an embedded adviser will still be at least one step ahead of the rest.
Assuming it is delivered on time and works as promised, the Pensions Dashboard will bring great benefits for virtually all.
However, it is only a contributor to overall “financial wellbeing” and employers who are starting to embrace this concept will need to make additional services available to achieve their goals.
For further information on financial wellbeing and its importance in the recruitment and retention of workers, do not hesitate to contact us on 0333 241 3350 or info@richmondhousecs.co.uk
This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned about the content hereof and any such action or inaction. Professional advice is necessary for every case.
Peter Murphy Dip PFS