Adrian Boulding: Dashboard engineers must avoid pension’s ‘Great Stink’

IT experts building the pensions dashboard will need to be as ambitious and far-sighted as those great infrastructure engineers of the Victorian era, argues Adrian Boulding

© Ian Macaulay

This year is the bicentenary of the birth of Sir Joseph Bazalgette, one of the greatest of the Victorian engineers – and there were plenty of them! Bazalgette (pictured, below) is perhaps most famous for the creation of an efficient network of brick-built sewers across London.

With amazing foresight, he created a system with enough spare capacity that it is still in use today, despite the population of our capital city more than doubling since the network opened.

And because much of London is low-lying, he added pumping stations at strategic intervals, to help move everything along. These buildings are themselves works of art and today Crossness pumping station, locally known as the Cathedral on the Marsh, is Grade 1 listed on account of its ornate cast iron interior. It is well worth a visit, as is Bazalgette’s Acton Mills pumping station, built in the Italianate-Gothic style and worth every penny of its Grade II listing.

Of course, for all his artistic flourishes, Bazalgette was at heart an engineer and he was responding to a Government commission. The ‘Great Stink’ of the summer of 1858 meant Parliamentarians could no longer carry on working next to the River Thames, which until then had basically been London’s main sewer – so something had to be done. Thanks to Bazalgette’s great works, ‘agricultural’ smells became largely a thing of the past in London.

Auto-enrolment has created something of a similar problem for the 21st century pensions sector. Such has been its success that, so far, more than 10 million hitherto un-pensioned employees have been put into workplace pension schemes – all supported by small contributions from their employer and their own pay.

There is a reason why employers had not previously pensioned this group, however – they change jobs amazingly frequently. The Department for Work and Pensions’ own analysis of this labour market segment shows that, of the 10 million, 170,000 of them change jobs every month! And what do they do? In pensions terms, at least, they just stand up and walk away – leaving a small deferred pot behind them …

Track auto-enrolment pots

So, before we have our own auto-enrolment-linked ‘Great Stink’, we need a way for the pension pots to be able to keep track of their owners. Hopefully the pension dashboard will do this – and hopefully the technology-driven plumbing of the dashboard will be as beautiful and far-sighted as Bazalgette’s was.

To keep a lid on the numbers of small pots, the pension dashboard needs a really easy transfer facility. For the little ones – say, pots under £5,000 – the dashboard should have a simple ‘drag and drop’ capability.

This would mean that, when an owner does pay a visit to the site, they can simply use the mouse to pick up their small, hitherto discarded, pensions and consolidate them with whichever pension they choose as their main scheme – after first checking, of course, that they are not consolidating into the highest-charging scheme.

Let’s give free rein to the engineers of today and let them make the pensions dashboard a thing of beauty that will last for all time and be able to handle rapidly increasingly numbers of pots.

Adrian Boulding is director of retirement strategy at Dunstan Thomas