A prototype Pension Dashboard which will allow people to view their retirement savings in one place will be ready next spring, the Government has said.
Eleven leading pension providers including Aviva, Standard Life and Zurich are on board with the pilot project which will be managed by the insurance watchdog, the Association of British Insurers. The dashboard is expected to include a State Pension forecast. It is hoped savers will then be able to plan for their retirement more effectively.
A person can have a dozen private pensions by the time they retire
On average, a person can have 11 employers over their working life, which means that they could end up with almost a dozen private pensions by the time they retire.
Easier to trace pensions
At the moment there is no way for people to see the value of all of their pensions in one place and research has shown that over a third of people approaching retirement find it difficult to keep track of their pension pots.
The pensions dashboard aims to also provide a link to “lost” pension pots with previous employers and could help release the £400 billion worth of pensions savings that the Department for Work and Pension estimates are currently unclaimed.
It could also prompt people to seek advice as to whether their pension savings are in the best place.
CEO of the People's Pension, Patrick Heath-Lay, said: "The Pensions Dashboard has the opportunity to change the way the we do pensions, allowing people the opportunity to see all their pensions in one place while driving greater efficiency within the pensions system. But it must be built first and foremost for savers and have strong, independent, ownership and governance."
New Pensions Advice Allowance
The Pensions Dashboard, first announced at Budget 2016, is the latest step in the Government’s wider strategy to help people to engage with their pensions earlier rather than nearing the point of retirement.
Earlier this month, the government launched a consultation on the new Pensions Advice Allowance. This allowance, which will come into force from April 2017, will allow people nearing retirement to take up to £500 out of their pension pots tax-free to put towards the cost of financial advice.
This means that an individual can receive advice on all the financial products that contribute towards their retirement income, such as multiple pension pots and other assets like ISA savings.
- For more money-saving tips, pick up the latest copy of Yours magazine