Here’s a question to test the deeper recesses of your memory. Can you recall how many television sets you have owned? And where you bought them from, and what you paid?
In my case it’s quite a lot. I’ve found it easiest to think about why I got rid of them, as some broke, some needed to be upgraded to keep pace with my neighbours and at least one was switched off in the great switch over to digital ten years ago. But I’ve a nagging feeling that I’ve missed a few out.
Old pension plans pose a similar challenge today. The average worker now has eleven jobs in their career, and one in four of us will get through sixteen or more employers. Automatic enrolment means that we only have to last for three months in a job and our employer must, by law, join us into their pension scheme. So we are going to amass quite a lot of old pension pots over the course of a career.
If we remember to tell our pension scheme whenever we move house, then we might still be getting annual benefit statements from them – although a growing number are ditching paper statements altogether. Not only that, but some older schemes are not required to provide regular statements, and some only send the pension we’d earned up to the date of leaving service, with no mention of how it’s (hopefully) grown since then! Add to this the fact that the annual statements will all arrive at different times of the year and can be quite long and unfathomable, it’s no wonder that people are struggling to form an accurate picture of their likely retirement.
Our consumer research last summer showed that only 46% of people were able to tell us how much in total they had saved for retirement, across all their past pensions. And a quarter of people don’t even know how much more money they are paying into their pensions each month.
Fortunately, help is hopefully on its way in the form of the Pensions Dashboard!
This nifty piece of technology will seek out all your past pensions for you. Just tell it “go find” and it will be all over every pension scheme in the land, like a sniffer dog in the customs baggage hall, unearthing every pension out there with your name on it.
And when it’s found them, it will report back to you. It doesn’t move any of your pensions or change them in any way, it simply provides you with a window to look in and see what’s there. The report will be a list, by provider, showing the pension you have got saved at each place.
For most people, the State Pension will provide most of their retirement income. But we don’t all qualify for the full New State Pension of £159.55 per week. Those with a patchy employment history may get less, whilst those who carried over benefits from the old State Second Pension may get more.
So it’s good news that the Pensions Dashboard will also show our individual State Pension, as well as our workplace pensions and any other voluntary contributions we’ve made.
At NOW: Pensions we are strong supporters of the Pensions Dashboard, and joined a consortium of pension providers that have built a prototype to prove the technology works. The actual project is owned by the Government and Ministerial responsibility has just been changed from Treasury to DWP. In Pensions Minister Guy Opperman, the dashboard has found an enthusiastic new sponsor, and he is expected to announce a legislative timetable to deliver the project soon, with real consumers being able to access it from 2019 or 2020.
Once the Pensions Dashboard has arrived, and we can see all our pensions in one place, I think we will wonder how people ever managed without it. Rather like the fridge, the telephone and the internet, it’s hard to fathom how people ran their lives efficiently without these tools that we just take for granted today! (Actually, milk was delivered to homes three times a day in the 1920s.)
I’ll finish with a couple of words on security for those who might think this all sounds a bit too “big brother”. The Pensions Dashboard will be an “opt-in” service, so it will never go looking for your pensions unless you have specifically asked it to. And it doesn’t store data either, so at the end of a session when you have looked at all your pensions, it simply closes the window through to your provider and doesn’t retain the values you’ve seen.
Adrian Boulding is Director of Policy at NOW: Pensions