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The costs behind a system to help people to see all their pensions together online have jumped by £54 million, with no date yet set for when it will be made available to the public, a spending watchdog has said.
Delays to the pensions dashboards programme have partly been due to a lack of digital skills and ineffective governance, the National Audit Office (NAO) said.
The estimated cost of the programme has jumped by 23%, from £235 million in 2020 to £289 million in 2023.
The report said a “range of factors” has led to the estimated cost of the programme increasing by £54 million.
“These include an increase in supplier costs, changes to the Money and Pensions Service’s (MaPS) underlying costing assumptions, and the period covered being extended by two years to 2031-32,” the report said.
Delivery delays due to shortfalls in digital capacity and capability have pushed back the final deadline for pension providers and schemes to connect
Gareth Davies, head of the NAO
The previous £235 million estimate had covered 10 years from 2019-20 to 2029-30, including five years of live running.
The report said that from April 2019 to March 2024, MaPS spent £59 million on the pensions dashboards programme.
Since 2019-20, the programme has been funded mainly through two industry levies that also fund MaPS’ other operations, it said.
They are the financial services industry levy, which is levied on regulated financial institutions such as banks and building societies, and the general pensions levy, which is levied on occupational pension schemes.
An estimated 16.3 million people could stand to benefit from pensions dashboards, enabling them to view information about their private, workplace and state pensions all together.
But the NAO’s report said: “DWP has not yet specified when pensions dashboards will become available to the public but, due to the later connection deadline, this is expected to be later than previously expected.”
Having an overview of multiple pension pots could help people to plan their retirement, make up shortfalls and find “lost” retirement savings. An estimated £26.6 billion-worth of pension pots are lost.
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Pension providers and schemes are required to connect to government digital architecture that supports dashboards by October 31 2026 – a year later than previously planned.
There were previously 23 separate staging deadlines for connecting up, depending on pension schemes’ size and type. The first deadline was August 31 2023 and the last deadline had been set at October 31 2025.
The DWP delegated responsibility for delivering the programme to the MaPS, an “arm’s-length” body, in 2019.
I am disappointed that the pensions dashboards programme has been delayed by a lack of skilled resources and ineffective governance - problems we see again and again across government
Dame Meg Hillier, chairwoman of the PAC
But it did not have assurance at the outset that MaPS had the capacity and capability to deliver a major digital programme such as this, the NAO said.
Between 2020 and mid-2022, DWP and MaPS made progress in delivering important elements of the pensions dashboards system, according to the NAO.
In December 2022, the MaPS told DWP that the delivery timetable was no longer viable.
A DWP review last year found that multiple factors had contributed to the delivery problems, including a lack of skilled digital resources and ineffective programme governance. These factors had also been raised in earlier reviews of the programme carried out by the Infrastructure and Projects Authority, the NAO said.
The programme is being reset and DWP and MaPS have made progress in some areas, the NAO said.
The DWP and MaPS have started to make changes in response to lessons learned, revising programme governance arrangements and strengthening how DWP works with its arm’s-length bodies, the report said.
Gareth Davies, head of the NAO, said: “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 (pensions dashboards programme) by a year, with no date currently set for citizens to benefit.
“Though progress has been made during the reset, DWP and MaPS 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.”
Given the potential impact of the programme for millions of pension savers, it is important to have robust scrutiny and to ensure lessons are taken for the future
Becky O'Connor, PensionBee
Dame Meg Hillier, chairwoman of the PAC said: “Clear and simple pensions dashboards would help people properly understand their pensions – preventing them from missing out on entitlements hidden in ‘lost pots’ and helping them plan for their future.
“I am disappointed that the pensions dashboards programme has been delayed by a lack of skilled resources and ineffective governance – problems we see again and again across government.
“The Department for Work and Pensions must learn lessons from what happened on this programme and strengthen how it works with its arm’s-length bodies including the Money and Pensions Service.”
A DWP spokesperson said: “As the NAO recognises, the pensions dashboards programme has made significant progress towards delivering a service which will transform how savers plan for their retirement.
“Action taken by the DWP to reset the programme to get it on track for successful delivery means connection testing will begin from August 2024 before a wider onboarding of pension schemes and providers from April 2025.”
Oliver Morley, CEO of MaPS said: “This report reflects the hard work of a dedicated team to inject real momentum into the dashboards programme, with support from the Money and Pensions Service, Department for Work and Pensions and wider stakeholder community.
“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.”
Becky O’Connor, director of public affairs at PensionBee said: “Given the potential impact of the programme for millions of pension savers, it is important to have robust scrutiny and to ensure lessons are taken for the future.
“The NAO report seems to draw a line under the reset, so all eyes will now be on getting to the staging guidance deadlines.”
Pete Glancy, head of policy at Scottish Widows said the value of pension assets in the UK exceeds £3 trillion.
He said the dashboards will help people start to compare how each of their pension pots is performing relative to others.
Mr Glancy said: “All of this will make it easier for people to determine whether they need to save more, what their personal retirement journey might need to look like, and whether it is worthwhile consolidating pension pots which are performing poorly into pots that might offer better value for money.
“In the longer term, we believe that pension dashboards will become a ‘national treasure’. However, this is a complex project, and whilst any delays or cost over-runs are always unwelcome, it’s important that the Government together with the pensions industry gets this right.”