British expats in the Emirates will soon be able to track lost pensions under a project launched by the UK Treasury.
The so-called Pensions Dashboard is expected to be operational in March next year and will allow savers to see all their pension pots in one place.
In the UK, on average, a person will have 11 employers through their life, which means they could end up with several different pension schemes by the time they retire. Currently there is no way for people to see the value of all of their pensions in one place. The Department for Work and Pension estimates that up to £400 million (Dh1.9bn) remains unclaimed.
Many long-term British expats in the region have lost track of what they put away in pension schemes before they left the country say financial planners.
“For British expatriates this is a much-needed instrument,” said Helen Morris, a financial consultant with Mondial Dubai, a financial planning and wealth management consultancy. She said that because there was no database for pension provision many people had simply lost their pension provision through ignorance and lack of financial stewardship.
“It can take months to track down some pensions, sometimes requiring me to follow a person’s CV to track where and when they may have paid into pension schemes. The unclaimed £400m is not a surprise as it can be a difficult task tracking down old employers. March can’t come too soon.”
Eleven of the largest pension providers will build the prototype of the Pension Dashboard, which the Association of British Insurers (ABI) will manage. Austria, Finland, the Netherlands and Sweden already have similar platforms.
“The Pensions Dashboard will unlock a huge amount of information that will help people make the best choices for them and I am delighted that 11 of the largest pension providers have agreed to work together to build a working prototype by March 2017,” said Simon Kirby, the economic secretary for the UK government.
“Technology, like mobile phone apps, has made day-to-day banking easier than it has ever been and it is time for pensions to catch up. Think of a future where you can compare your pension pots with the touch of a button.”
Research from the National Bonds Corporation in the UAE suggests that people will need a pension pot of two thirds of their income for retirement.
Therefore if one earns Dh15,000 per month, translating to an annual salary of Dh180,000, you will need Dh120,000 in retirement. For a 25-year retirement, that requires a pension pot of Dh3 million.
It is believed the majority of UAE expatriates are failing to meet their retirement requirements. Renoy Kundukulam, Noor Bank’s head of priority banking, said two in three expats were not planning adequately for when they stop working.
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