Delays to pensions dashboards have pushed the estimated cost of the Pensions Dashboards Programme (PDP) up by 23 per cent since 2020, rising from £235m to £289m in 2023, a report from the National Audit Office (NAO) has revealed.

The NAO also found that the estimated gross benefits have fallen by 5 per cent, based on an assessment of how much people would be willing to pay for a pensions dashboard and the value of lost pension pots recovered, falling from £437m in 2022 to £413m in 2023.

The increase in costs and decrease in gross benefits also prompted a fall in the estimated net present social value – or net benefit – of the programme, which fell from £268m to £211m.

According to the report, a total of £59m was spent on the PDP from April 2019 to March 2024, with the 2022-23 expenditure categorised as capital spending, meaning it was used to develop new infrastructure rather than for running costs.

The NAO revealed that Maps does not intend to categorise the majority of expenditure on the PDP in 2023-24 as capital spending, however, meaning that most spending in the past year did not result in further development of the digital architecture, but was instead used to maintain the platform and services during the reset.

However, the estimated cost to industry has fallen, as the Department for Work and Pensions (DWP) estimated that from pension schemes and providers will incur costs of £688m from 2022-23 to 2031-32, a £162m decrease from its 2022 estimate of £850m.

The NAO's investigation found that the Money and Pensions Service (Maps) also remains confident that the programme represents value for money.

The DWP first handed the responsibility for delivering the PDP to Maps in 2019, tasking it with the design and implementation of the digital architecture needed to make pensions dashboards work across the UK.

However, the NAO pointed out that DWP did not have assurance at the outset that Maps had the capacity and capability to deliver a major digital programme such as the PDP.

And whilst DWP and Maps made progress in delivering important elements of the pensions dashboards system between 2020 and mid-2022, Maps informed DWP in December 2022 that the initial PDP delivery timetable was no longer viable.

A subsequent review carried out by DWP in February 2023 found that multiple factors had contributed to the delivery problems, including a lack of skilled digital resources and ineffective programme governance, which had also been raised in earlier reviews of the programme carried out by the Infrastructure and Projects Authority.

This delay led to a programme reset and a revised final connection deadline of 31 October 2026, one year later than what was outlined in the original timetable.

The NAO also pointed out that DWP has yet to specify when pensions dashboards will become available to the estimated 16.3 million users who could stand to benefit, warning that this is likely to be later than previously expected.

However, the report acknowledged that the DWP and Maps have made progress in some areas, including revising the PDP’s delivery plan, reviewing the digital architecture to ensure it meets requirements, and appointing a new senior responsible owner.

It also revealed that the DWP and Maps are expecting to consider whether the PDP is ready to leave reset this month (May 2024).

In addition to this, the NAO noted that DWP and Maps have started to make changes in response to lessons learned from the experience, revising programme governance arrangements and strengthening how DWP works with its arm’s-length bodies.

In line with the lessons learned, Maps also modified its approach to scrutinising business cases and, as part of the reset process, has revised the PDP’s governance.

Commenting on the report, NAO head, Gareth Davies, said: “Once completed, the PDP could benefit millions of people by providing a secure, comprehensive and online point of access for information about their pensions.

“However, 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 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.”

Adding to this, Public Accounts Committee chair, Meg Hillier, 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 PDP has been delayed by a lack of skilled resources and ineffective governance – problems we see again and again across government.

“The DWP 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.”

Commenting in response to the report, Maps CEO, Oliver Morley, 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, DWP 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.”

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