Fraud protection critical in pensions dashboard rollout – AJ Bell

Protecting savers from scammers must be a central priority in the rollout of pensions dashboards, AJ Bell has argued.

The investment platform has urged the government to ensure all potential scams risks are considered, and where possible mitigated, ahead of the launch of the first dashboards in 2023.

A consultation by the Department for Work and Pensions (DWP) on regulations to introduce pensions dashboards in the UK closes on Sunday 13 March.

AJ Bell research suggests there could be 27 million ‘deferred’ retirement pots by 2035. The firm also highlighted that savers will need help interpreting their pension information – but warned that the first versions of dashboards are unlikely to offer this help.

“People now expect to be able to access their finances at the touch of a button via their mobile phone,” AJ Bell head of retirement policy, Tom Selby, commented. “As such, the government is playing catch-up with people’s expectations in introducing legislation to facilitate pensions dashboards.

“However, late is most certainly better than never and dashboards undoubtedly have the potential to help millions of people not just locate their retirement pots but engage with them as well.

“This will become even more important as the combination of an increasingly transient workforce and automatic enrolment will inevitably see more savers with retirement pots scattered far and wide.”

“First and foremost, people need help locating these lost pensions. They need to be confident the information they see is accurate and, crucially, any potential gaps need to be clearly explained.

“As Dashboards develop from these early versions a competitive market will hopefully flourish, with different tools made available so savers are better equipped to turn information about their pensions into affirmative action.”

Selby also suggested that introducing more digital ways to access pensions information will lead to an “increased risk of scams” but said that despite this risk the developments should still go ahead.

“As scammers will continue to innovate to defraud people, government and the Money and Pensions Service (MaPS) need to be vigilant, and consistently and continually strive to close down scams,” he added.

“Identity services will be key to ensuring savers using dashboards are protected and should take on responsibility for checking the right people receive the right information about their retirement pots.

“Thorough validation of a person’s identity is critical to make sure it is the customer who is trying to gain information and not a scammer. The stakes could not be higher on this – if dashboards lead to people’s pensions being compromised then the loss of trust in the service would likely be fatal.”

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