The Association of Independent Professionals and the Self Employed (IPSE) has expressed “bitter disappointment” over the Government’s just-announced decision to take a back seat in the rollout of the new “pensions dashboard”.
The Secretary of State for Work and Pensions, Esther McVey, announced on the 4th of September that industry, not Government, would take the lead role in the project. Her statement was quickly followed by a pledge from Guy Opperman, Minister for Pensions and Financial Inclusion, that Government would legislate where necessary to safeguard pension savers and their personal information.
He did not, however, commit to compelling pension providers to provide comprehensive data and declined to confirm whether state-held pension data would be incorporated into the project.
The pensions dashboard aims to integrate information concerning private, state and workplace pensions schemes, allowing savers to go to one central online location to view their available pension. It is scheduled to go live in April next year.
A number of pension experts immediately raised concerns in the wake of this back-step by Government that the project may fail unless the Government makes strong commitments to it. Jon Greer, head of retirement policy at Quilter, for example, said that Government “cannot wipe their hands” of the pension dashboard as, without its data, the resulting product would be as useful as a recipe that omitted key ingredients.
IPSE, which has long warned of a pension time-bomb among freelancing and contracting professionals because of the lack of suitable pension schemes available for them, highlighted its own recent research, How to solve the self-employed pensions crisis, which demonstrated that a significant proportion (51%) of contracting and freelancing professionals trusted official online Government sources for guidance.
The contractor association’s Senior Policy Adviser, Jonathan Lima-Matthews, pointed to clear evidence that Government has a vital role to play in solving the pensions crisis being faced by self-employed people.
It should be noted that flexible contracting professionals who work on assignments as umbrella company employees will be spared this danger, as compliant, reputable umbrella services will auto-enrol them to company pension schemes. However, contracting professionals working via their own limited companies are not eligible for these schemes.
Lima-Matthews continued: “That’s why IPSE is bitterly disappointed that the Government has now backed down on its earlier promise to deliver the crucial pensions dashboard. With just 31 per cent of the self-employed saving into a pension, the Government must have a role in solving this crisis.”
He went on to add that the Government’s apparent reluctance to share state pension data would make it “extremely difficult” for the pension industry to develop a complete product serving the needs of all UK savers.