Dashboard costs rose by 23% in 2023, figures show

A report from the NAO, published today (Friday), highlighted that a shortage in digital skills contributed to delays to the flagship pensions dashboards initiative.

The NAO found that capacity and capability issues, including a lack of digital skills and ineffective governance, also led to delays to the Pensions Dashboard Programme (PDP).

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.

“However, 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.”

The NAO’s report highlighted that, when the Department for Work and Pensions (DWP) delegated responsibility for delivering dashboards to one the Money and Pensions Service in 2019, it did not have assurance at the outset that the organisation had the necessary “capacity and capability” to deliver such a major digital programme.

Reset was needed

The initial delivery timetable was pushed back in December 2022 when it became clear that the plan was no longer viable.

The NAO said reviews by the DWP and the Infrastructure and Projects Authority had highlighted “multiple factors” affecting delivery, including “a lack of skilled digital resources and ineffective programme governance”.

Following a reset of the programme, the government then set out the schedule for schemes and pension providers to connect to the dashboard system. The revised final connection deadline of 31 October 2026 is one year later than the original timetable.

As well as the PDP’s costs increasing, the figure for “estimated gross benefits” calculated by the NAO has fallen, from £437m in 2022 to £413m in 2023. This figure is calculated by the Money and Pensions Service and is based on the average price of a pension dashboard service per user and the estimated value of recovered pension pots.

The DWP and the Money and Pensions Service are expected to consider this month whether the PDP is ready to proceed to the next stage of implementation.

Davies said the government and the responsible bodies “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”.

‘Sustained progress’

Despite the programme’s issues, Oliver Morley, chief executive officer of the Money and Pensions Service, said the report reflected “the hard work of a dedicated team to inject real momentum into the dashboards programme”.

He continued: “We’re making sustained progress, delivering the information industry needs to be able to connect and so enable us to transform financial planning for generations to come.”

Pete Glancy, Scottish Widows’ head of policy, pointed out that the £289m figure was less than 0.01% of the estimated value of pension assets in the UK – more than £3trn.

“In the longer term, we believe that pension dashboards will become a ‘national treasure’,” Glancy added. “However, this is a complex project, and while any delays or cost over-runs are always unwelcome, it’s important that the government together with the pensions industry gets this right.

“Recently there has been a new momentum within the programme delivering pension dashboards, and this needs to be maintained.”

Further reading

TPR: Time is running out to clean up your data (1 May 2024)

‘Capacity crunch’ risk as schemes failing to plan for dashboards (18 April 2024)

Time to pick up the pace on pensions dashboards (25 March 2024)