Tim Middleton discusses the pros and cons of the new Pensions Dashboard.

At a launch event on 12 September at Aviva's trendy Digital Garage in Hoxton, Economic Secretary to the Treasury, Simon Kirby, committed the Government to having developed a prototype Pensions Dashboard by next spring.

The Dashboard is an exciting concept, and – assuming that it can be made to work, of course – will provide information about accrued benefits with a degree of thoroughness that to date has not been possible.

Members will be able to track all their pension savings, including State benefits, and so will have a far clearer picture of when they can start to draw benefits.

For the privileged few for whom it is relevant, it will now be far simpler to manage contribution rates to avoid exceeding the Lifetime Allowance.

The concept is far from new. Data Aggregation websites first came to prominence at least a decade ago. In the UK, the concept is most closely associated with sites such as Expedia, Confused and Trivago.

Perhaps of more relevance here is the example of Mint, which was launched in the USA in 2007. Mint is an online platform for consumers designed to aggregate financial information such as banking details, savings and other investors.

To date, the venture has been reasonably successful, but there have been problems that will provide valuable lessons for the Pensions Dashboard.

Some financial institutions have been reluctant to participate as doing so involves publicly sharing commercially sensitive information about financial products. Whilst this is potentially beneficial for consumers, pension providers could come to perceive the Dashboard as something of a threat.

Another serious issue that the Dashboard will need to address is cybercrime.

A hacking exercise comparable to that suffered by Talk Talk could provide criminals with information about the pensions savings of millions of people, with information about not just one form of accrued pension saving but all of them.

The potential for fraud is enormous.

Finally, it is worth considering what the Dashboard tells us about the direction of the Government's pensions policy.

You may recall that previous Pensions Minister Steve Webb had his own aggregation project. Pot Follows Member was intended to consolidate previous pension savings into a single large pot.

It was due to be launched around the same time that the Dashboard was announced, but you will recall that last autumn it was quietly and unceremoniously parked.

Whilst the previous Government was keen to facilitate accumulation, the emphasis now appears to be on promoting decumulation.

This will do much to boost tax receipts over the short term but has the potential to cause a post-retirement poverty crisis at some point in the future.

The Dashboard is an exciting development which will do much to improve public engagement with pensions. However, the concept is not without risks, and we must consider these carefully.

Written by Tim Middleton, Technical Consultant, PMI.