Dude, where's my pension?

Government legislation isn’t incredibly exciting at the best of times, but even in this context I’m sure the Pension Schemes Bill 2021 isn’t likely to be high on anyone’s list of bedtime reading. However, having just passed through the House of Lords and now awaiting Royal Assent, there is one part of this Bill that is likely to be welcome to many in the workforce. 

That is, the Pensions Dashboard.

It’s an all too common scenario for many who have worked multiple jobs with multiple companies over the years. Particularly since the introduction of auto-enrolment, it has been normal practice to be set up with a new pension scheme upon starting with a new company. Unless specific action is taken to consolidate these, as people move around they often leave in their wake a trail of pension schemes.

Combine this with changes of address or changes of name, and you have a recipe for pension money that could potentially be lost forever.

Times, they are a changin'

All of that is set to change with the introduction of the Pensions Dashboard, with a planned release date in 2023. The idea is for a central record to be kept of all current pension holdings. This has the potential to be incredibly useful in locating lost pension pots that have long since been forgotten about, and keeping track of an individual’s overall pension savings.

But it’s by no means a reason to give less focus to your retirement savings. If anything, it will hopefully shine a light on the need to ensure that your pension funds are being managed in a way that is right for you. 

While the Pensions Dashboard will plan to give an oversight of the current schemes, it won’t make any changes to the investment portfolios, won’t review the fee structure, won’t ensure the beneficiaries are correct, likely won’t highlight any protected tax free cash, guaranteed annuity rates or guaranteed minimum pensions, and won’t ensure the right options are available for accessing the money in retirement.

The details of the Dashboard are yet to be legislated, but there is also the potential for actions such as pension consolidation to be completed by members through the Dashboard itself. This is an area that will need to be carefully considered, as there will be a risk that by moving schemes without fully researching the details, valuable benefits such as the guarantees mentioned above may be lost.

No silver bullet for retirement

So while the Pensions Dashboard will be a welcome addition for those trying to locate forgotten pensions, there will still be no substitute for taking specific, focused action to ensure that your pension plans are aligned with your retirement objectives.

If you have questions about your own pension schemes or are unsure whether your current pension investments are right for you, please feel free to get in touch for a no cost, no obligation discussion.

The information given and opinions expressed are subject to change and should not be interpreted as investment advice. All data is sourced by IM Asset Management Limited unless otherwise stated. All financial and wealth management services are provided by IM Asset Management Limited which is regulated by the Financial Conduct Authority (FCA), FCA Firm Reference Number 402770.

So while the Pensions Dashboard will be a welcome addition for those trying to locate forgotten pensions, there will still be no substitute for taking specific, focused action to ensure that your pension plans are aligned with your retirement objectives.”