Current proposals will only allow users to see their pension pots in one place, effectively a read-only service. Users will not be able to take any further action such as modelling changing their pension contribution and estimating the impact this will have on their retirement income.
The user research was conducted by Britain Thinks and showed how pensions dashboards will work. It is the biggest quantitative survey conducted on pensions dashboards in the UK. The research found:
Over 60% of people said that dashboards will help them better understand their pension.
2 in 3 working aged adults* are likely to use them.
7 in 10 working people would like dashboards to be interactive.
For some people, finding and viewing their pensions is enough of a draw to use dashboards, but others expected the service to go further. This was especially true of younger people who are more likely than those of retirement age to want to take further action. This includes using modelling tools to see what happens if they adjust how much they contribute to their pension.
The Government and regulators are expected to consult on pensions dashboards regulations in the coming weeks. The ABI recommends that legislation should be future proof and enable providers to make dashboards interactive. A one-size-fits-all solution will not work – a range of innovative features is needed to support different user needs. This should include functions that show users how changing their contribution and retirement age can impact their retirement income. Other features could include signposting to pension advice and guidance and integrating pensions data with other supporting services. This would encourage and empower savers to manage their pension savings.
Yvonne Braun, Director of Long-Term Savings at the Association of British Insurers, said: “Our new research is clear: pensions dashboards will be very popular. But most people want to be able to actively engage with their pensions on dashboards, rather than use a read-only, static website.
“To ensure dashboards can truly empower people to engage with their pension savings, they must offer interactive features. Dashboard providers have to be able to innovate to meet the needs of younger age groups, and the legislation and the regulatory regime must allow for this.”
Rachel Rowlinson, Research Director at Britain Thinks, said: “Across our research on consumer financial behaviours we find there is high demand for easy-to-use digital tools that help demystify products. This research has evidenced that pensions dashboards offer a real solution to significant issues consumers face in accessing, understanding and managing their pensions – which means there is a genuine appetite for use. The key challenge moving forwards will be to ensure that consumers are not only logging in as a one-off to look, but also being nudged to build habits around engaging with their pensions more consistently, and taking active steps to plan and manage their financial futures.”
Providers are expected to make data available to dashboards from 2023.
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