We’re always keen to keep you up-to-date with the latest tools and dashboards, and the Pensions Dashboard Project is currently as fresh as it gets. It’s so fresh, in fact, that the government have yet to even finish making it. You can, however, sign up to their newsletters to see how they’re getting on. Here’s why we think it looks like a good idea.
As their website and video point out, very few of us go through life these days without accumulating jobs, and with that – naturally – we accumulate pension pots. As nuts as it may seem, many of us simply seem to forget that we ever had these collections, which means that there is currently around £400 million looking for a home (no, you can’t have all of it for yourself).
The figures suggest that, during the average lifetime, most people go through approximately 11 jobs. Now, writing as someone who has reached the tender age of 40 and found myself guilty of such wasteful accumulation, that sounds like a heck of a lot of admin to go through in order to find out what I’ve forgotten and who owes me what.
Therefore, it’s quite a relief to find that the government and the various strands of industry involved in delivering our pensions have begun work on the Pensions Dashboard Project (or the Pensions Dashboard Prototype Project, to give it its official “just in case this doesn’t work out” name). It’s actually a great example of the financial arm of the government making good on their promises to drag themselves, kicking and screaming, into the digital era. If it works, it will help a lot of people.
In short, the Pensions Dashboard Project will allow people to input confidential details (albeit, confidential details that the likes of Experian already have) such as your National Insurance number, after which the dashboard will scrape available tax and pensions data and locate anything that you have saved up and forgotten about.
So, how does this help the self-employed community? Well, it might take a small weight off some of our minds. After all, at some point in our pre-self-employed lives, many of us will have been employed by pension-paying companies. If, like this writer, you’ve never been particularly good at keeping track of financials (hence my need for My Accountant Friend), you probably departed several jobs without giving a second thought to what might become of those trickles of future income. In which case, the Pensions Dashboard Project should prove very interesting indeed.
On top of that, it might just give some of us the kick up the backside that we need. A recent report by the Office of National Statistics, published around the same time as the release of the Pensions Dashboard Project, showed that while the self-employed workforce in the UK is rapidly growing, 45% of us aged between 35 and 55 have no private pension plan. That means that, once we reach pensionable age, we’ll be looking to live on the £500 (approx) per month that the state pension provides. Lordy!
Around this time last year, on this very blog, we chatted with an expert in pensions for the self-employed – a chap by the name of Alex Caulder – and he was quick to draw our attention to this very problem. Given that we like to write about tax efficiency on this blog, he also advised us on the best ways to position your private pension alongside your tax. For more information on that, you can read his interview here.
In the meantime, we suggest signing up for the forthcoming information service being provided by the Pensions Dashboard Project. It looks like it could be a great way to save yourself (or, at least, start thinking about saving yourself) a lot of future financial hassle.