Capacity and capability issues, including a lack of digital skills and ineffective governance, have contributed to delays to the UK government’s Pensions Dashboards Programme (PDP), according to a new National Audit Office (NAO) report.
Pensions dashboards will enable people to view information about their private, workplace and state pensions online, securely and in one place.
The Department for Work and Pensions (DWP) expects these dashboards to deliver significant benefits by helping people to plan better for retirement, make more informed financial decisions and connect with ‘lost’ pension pots.
The PDP is one of DWP’s flagship programmes and forms part of the UK’s Government Major Projects Portfolio. Its aim is to design and implement the digital architecture needed to make government and private sector pensions dashboards work across the UK.
In 2019, DWP delegated responsibility for delivering the PDP to one of its arm’s-length bodies, the Money and Pensions Service (MaPS). However, it did not have assurance at the outset that MaPS – which was formed in October 2018 – had the capacity and capability to deliver a major digital programme such as the PDP.
Between 2020 and mid-2022, DWP and MaPS made progress in delivering important elements of the pensions dashboards system. However, in December 2022, MaPS informed DWP that the PDP’s delivery timetable was no longer viable.
Meanwhile, the Financial Conduct Authority (FCA) started a consultation along with the PDP in December 2022 on standards for operators of pension dashboards, and set out requirements for providers of non-workplace pensions with the aim to improve engagement.
A subsequent review carried out by DWP in February 2023 found that multiple factors had contributed to the delivery problems, including a lack of skilled digital resources and ineffective programme governance. These factors had also been raised in earlier reviews of the programme carried out by the Infrastructure and Projects Authority.
The DWP then issued a written ministerial statement providing an update on the timeline for connecting to pensions dashboards.
In the statement, Laura Trott, the then parliamentary under secretary of state for pensions, explained that the PDP would be unable to meet the connection deadlines set out in legislation, and the timeline would need to be revised.
This delay led to a programme reset and a revised final connection deadline of 31 October 2026 – one year later than what was outlined in the original timetable.
DWP has yet to specify when pensions dashboards will become available to the estimated 16.3 million users who could stand to benefit, according to the NAO. However, due to the delay, this is likely to be later than previously expected, it added.
According to the NAO report – Investigation into the Pensions Dashboards Programme – the estimated cost of the PDP has also increased by 23%, from £235m in 2020 to £289m in 2023, while the estimated gross benefits have fallen from £437m in 2022 to £413m in 2023, the NAO stated.
“The PDP is currently being reset. DWP and MaPS have made progress in some areas including revising the PDP’s delivery plan, reviewing the digital architecture to ensure it meets requirements, and appointing a new senior responsible owner with the necessary digital technology experience to lead the rest of the programme. DWP and MaPS expect to consider in May 2024 whether the PDP is ready to leave reset,” the NAO said in a statement.
DWP and MaPS have also started to make changes in response to lessons learned from the experience, revising programme governance arrangements and strengthening how DWP works with its arm’s-length bodies.
Gareth Davies, head of the NAO, said: “Once completed, the PDP could benefit millions of people by providing a secure, comprehensive and online point of access for information about their pensions.”
He noted, however, that “delivery delays due to shortfalls in digital capacity and capability have pushed back the final deadline for pension providers and schemes to connect to the PDP by a year, with no date currently set for citizens to benefit”.
He added: “Though progress has been made during the reset, DWP and MaPS must continue to work closely to ensure the final stages of the PDP are delivered smoothly and the public can begin to have access to this important service.”
Jamie Jenkins, director of policy at Royal London, said: “Pensions are complex financial products, so it is little surprise that building a fully integrated online service for consumers is a costly exercise, as it was for Open Banking. But this is a truly progressive initiative which will make it much easier for people to plan for their retirement.”
He said that the costs of the programme reflect the work involved and serve to illustrate why priority must be given to key policy changes for pensions, “primarily the digitalisation of data through dashboards and the adequacy of contribution rates for those saving into workplace pensions”.
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