Sole traders glad to see green light for pensions dashboards

A green light for all workers to eventually have their own ‘pensions dashboard’ has been cheered by supporters of the self-employed.

The Federation of Small Businesses said that, in light of fewer than one in three sole traders having a pension, the government’s commitment to rollout the dashboard – which should help boost retirement saving among freelancers – was “encouraging.”  

It is “particularly welcome” that private schemes will face primary legislation requiring them to feed their data into the dashboards, which will show savers all their details, from multiple providers, on one online interface, the federation said.

“Putting individuals in control of how and when they access their data can help to increase awareness and understanding of saving for retirement,” confirmed the government, almost hinting at why it should help sole traders.

'Multitude of different jobs'

In its response to a consultation on the dashboards, the government added: “The experiences of people saving for a pension in the UK are changing. An increasing shift to DC [Defined Contribution] pensions is placing increased responsibility on the individual to plan and make decisions about their retirement.

“People are tending to live longer and, with the changing nature of the labour market, are more likely to take on a multitude of different jobs, or become self-employed.”

'Encourage the self-employed'

Mike Cherry, chairman of the FSB, reflected: “Comprehensive, user-friendly pensions dashboards are one important way to encourage the self-employed to think seriously about retirement plans.”

But he is less supportive of the timeline. According to the consultation, schemes are to be granted “three to four years” after a trial dashboard goes live to populate their data into savers’ dashboards.

'Heavy-lifting'

“We question the three to four-year timeframe for schemes to prepare data for dashboards,” the FSB said.

“The government’s own response accepts that The Pensions Dashboard Prototype Project has already done the heavy-lifting where developing the necessary tech is concerned. It’s interesting to note that a lot of consultation respondents feel this timeframe is too generous.”

Some of the frustration with the timeline may be down to the scheme already being later than hoped, given the government initially wanted the dashboards to be designed, funded and launch by this year – 2019.

However, officials have spoken of the need for industry (which will design, develop and own the dashboards) not to ‘underestimate’ the scale of the scheme, given the medley of security, infrastructure and consumer issues involved.

'Critical'

And there may even be a shorter design and build stage once uncertainty over the EU is cleared up, hopes the FSB. Mr Cherry said: “Hopefully once the Brexit impasse is resolved we can move back to addressing more critical domestic issues like this one, not least the UK’s late payment crisis, the spiralling costs of doing business and a regressive business rates regime.”

Sole traders, savers and other affected parties wishing to respond to the 8-week consultation, by answering its specific questions or commenting generally, can do so online via Citizen Space.

If you need freelancer accountants to help you manage your finances then 3 Wise Bears can be a great option. 

 

10th April 2019

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