PENSIONS INSIGHT
What now for the pensions dashboard?
Shaun Gomm, commercial director of Sigma, asserts that the solution must be designed mindful of consumers’ needs
A n ageing population, increasing levels of personal financial debt and a decade of extremely low interest rates have had a worrying effect on the UK’s pension pots. In fact, recent figures from the Financial Conduct Authority (http://bit.ly/2CPgSS0) suggest that up to fifteen million people are not currently saving into a retirement fund. For many, pensions are simply an unknown entity, with 65% of working age people saying that they don’t know where to go for pension information or how to save, according to research by MoneyFacts. This is hardly surprising, given that the UK pension system remains one of the most fragmented and complex to navigate in the world. We have, on average, eleven different pension pots (http:// bit.ly/2cxxsMI) over the course of our lifetime. Currently the only way to access information about them is to ask the government for a state pension estimate, before separately contacting (or appointing a financial advisor to contact) each pension provider to gather and consolidate that information. Tracking the progress of each can be a laborious task as a result. Seeing a consolidated snapshot of this information through a national pensions dashboard, as agreed in October (http:// bit.ly/2yVLMKv), is therefore a vitally- needed step forward. The initiative is set to simplify how people can keep track of their pension, allowing them to store their information in one place on a user-friendly platform. In Sweden, Sigma has worked with the government and pension providers to deliver an aggregator platform that allows every citizen’s pension investment to be
accessed through a single portal: www. minpension.se. The dashboard makes it easier for people to keep track of their pension pots and has proved popular with the population – over 50% of those eligible to use the system have registered with the service. ...the potential is great, the project is moving far too slowly for some Almost everyone in the industry recognises the huge value of the pensions dashboard initiative, and while I’m very enthusiastic about this development, I still see challenges and possible barriers which must be overcome if the project is to drive the consumer engagement and behavioural change that is needed to reduce financial insecurity in later life and to plug the retirement savings gap. Although the potential is great, the project is moving far too slowly for some. The fact that it wasn’t mentioned in the latest Budget announcements is a little worrying, and the organisations taking responsibility for driving the initiative forward have changed several times. With early research conducted by the Money Advice Service, and the first phase being governed by HM Treasury but managed by the Association of British Insurers (ABI), the project has finally landed in the hands of the Department for Work and Pensions (DWP). But pensions minister, Guy Opperman, has acknowledged that we remain “some way off” a working solution. The DWP is conducting its own feasibility study and whilst this is an
understandably robust approach, it’s also frustrating for the insurance companies, fintech firms and myriad of other stakeholders that progress isn’t happening more quickly. A clear timeline must be implemented to ensure that the project remains on track for completion by 2019. Secondly, if the pensions dashboard is going to prove viable in the long- term then there needs to be more than 90% coverage in terms of the pensions providers taking part in the scheme. The goal of the dashboard is to offer information on all pension pots in the same, easily-accessible place; but if only some of your previous employers have agreed to participate, it would bring into question the viability of the whole exercise. This may not happen immediately, but it does need to happen, and it seems likely that the government will need to legislate to ensure that providers make their data available to the platform. Finally, the pensions industry is inclined to look inward; to think that it already has all the answers. I was delighted to see the results of the ABI’s recent consumer research, but the industry would do well to remember that ongoing user engagement will be key not only to delivering products and services that people can easily use and understand, but also in winning the public relations battle. We need to ensure that the real people, who we want to engage, and who will benefit the most from this project, are aware that it is happening, and are bought in to the value it can deliver. Overall, we must bear in mind that we are designing for a wider public and that any solution must be designed with the consumer’s needs at front of mind. n
| Professional in Payroll, Pensions and Reward | February 2018 | Issue 37 32
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