Rising costs, largely due to rising life expectancy, meant firms started turning away from DB and pushing savers into defined contribution schemes. The danger now is that people might not save enough, or at all, for later life and experts already fear a pensioner poverty crisis.
In the early days of the coalition government, a plan was hatched to address this. Auto-enrolment, introduced in 2012, means almost everyone is now signed up to a workplace pension automatically, remaining there unless they opt out.
The effects have been significant. In the first decade, around 11 million people were auto-enrolled. The number of women saving into a pension rose 50pc. Almost £33bn more cash went into pensions. However, with modern workers changing jobs more frequently, it gradually created around five millions forgotten pensions.
As a result, savers may lose out on growth, pay high fees and even forget to claim a pension altogether by the time they retire.
Many in the industry saw this coming, as did the Government, and conversations began about a single place for people to view all their pensions. The Financial Conduct Authority recommended a pensions dashboard in 2014, then chancellor George Osborne confirmed it in the 2016 Budget.
Initially it was industry-led, but when the 2019 deadline came and went, the project was passed to the Money and Pensions Service. Another deadline was set for pension schemes to begin connections by August 2023 and finish by October 2025.
By December 2022, the Money and Pensions Service admitted this was no longer possible. In February 2023, the Department for Work and Pensions concluded multiple factors had contributed, including “a lack of skilled resources and ineffective programme governance”.
By March, former pensions minister Laura Trott had announced a “reset” and a new deadline for connections by October 31, 2026.
That summer, the National Audit Office was asked by Parliament to investigate. Reporting back in April, it confirmed “capacity and capability issues, including a lack of digital skills and ineffective governance” had contributed to delays. It also said the cost had increased 23pc, from £235m in 2020 to £289m in 2023.
Even today, it remains unclear when anyone will be able to actually use the dashboard. But while the delays are indisputable, experts disagree on the reasons why. Some believe progress has been deliberately stalled.
Pensions expert Michael Johnson, formerly investment bank and fellow of the Centre for Policy Studies, is among them. He says vested interests, namely the “old guard” of long established pensions providers, have been intentionally stifling the project for their own gain.
