by Scott Finnie, Product Architect, Hymans Robertson
The simple answers are, respectively, yes, yes, yes and yes.
Yes, we need one. And we need many. Yes, the government should do it. And so should the industry.
Clearly nonsensical – until we consider what “it” really is. And therein lies the crux of the problem.
What's in a dashboard?
“Dashboard” is an entirely understandable choice of term. As a consumer, of course I’d like to see all my pensions in one place. Recent research from the People’s Pension suggests 46% of UK working age people see ease of management as a reason for consolidation into one pension. Separate research by Aegon indicates some reluctance to consolidate, but support for an aggregated view.
And yes, I’d like to compare apples with apples: how much do I have overall? Maybe I want to look at my options: should I buy an annuity? Drawdown? What about cash? How much income might I expect? What if I retire earlier/later?
All valid questions, and exemplars of the innovation the government is keen to catalyse. Surely that means we need many dashboards, and the industry should drive them not the government?
Yes, yes and no.
All of those ideas have one thing in common: they need access to underlying pension information. That’s the enabler: the fuel for the engine. And whilst we want innovation in the user experience, it needs standardisation of, and secured access to, the data. Unfortunately, the “dashboard” terminology confuses rather than helps here. Contrast it with Open Banking where the delineation is clear: in answer to the question What is Open Banking?, its website says:
"Open Banking is the secure way to give providers access to your financial information"
A clear description that clarifies what Open Banking does – and doesn’t do. It provides a means to access the data in a secure, standardised way. It doesn’t mandate or constrain what’s possible with legitimate access to it. Open Banking isn’t the User Experience: it’s the enabler for innovation in user experience.
Open Banking defines a model that the Pensions Dashboard would do well to follow. A consistent, secure mechanism to access pension data would provide a platform for innovation in the lifetime savings market. Furthermore, the industry already has demonstrable evidence in this regard. The Origo standards facilitate secure, consistent access to pensions and savings for financial advisers.
By focusing on standardised access, the Pensions Dashboard would catalyse new and creative ways for consumers to engage with their retirement savings. Surely a valuable contribution given the general concerns in this area. Returning again to the People’s Pension research1, 14% of those surveyed don’t know how many pensions they have. 3 in 10 don’t even know who their workplace pension provider is.
Separating data access from user experience provides clear roles for industry and government, and a strong reference in open banking:
Government oversees the data standards
Industry implements the standards and innovates in the user experience on top.
Perhaps a name change would help. Open Pensions anyone?
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