I’m a huge proponent of the pensions dashboard, however, like most in the industry, I’m getting a bit tired of waiting for the DWP to issue something of substance.
Knowing exactly the type of gremlins that lie in providers’ pension data, I don’t think the 2019 deadline is achievable and at best we are looking at 2021 for even the best-in class providers to submit their data.
Three years is a long time and rather than go on about why the dashboard should in fact be multiple dashboards and that we don’t need full coverage on day 1 - debates which have been had ad nauseum in the industry already - I thought it may be helpful to point out a couple of developments that may make the dashboard obsolete by the time it comes into production.
Banks and data aggregators are already offering dashboard-like functionality to consumers and the ability to see one’s pension balance next to one’s current account is hugely appealing. PensionBee’s recent integration with Starling Bank, the coolest new bank on the block, shows the power of aggregated data for consumers.
Both PensionBee and Nutmeg are also available on Bud - a provider of dashboards to banks - and we have heard more pension providers are expressing interest in joining the party.
Now of course this is slightly less appealing if you have 11 or so different pensions, but there are already initiatives underway to reduce the number of pots people accumulate in the first place…
Pension follows member
A proposal to allow consumers to choose their auto-enrolment pension is gaining momentum in the industry. Indeed, pension follows member will dramatically reduce pension pot proliferation, particularly in industries where job-hopping is fairly prominent.
We at PensionBee support pension follows member because it will encourage consumer ownership of pensions and pension outcomes. But let’s be honest - not everyone will take it up because the employer’s default would still be available, well, by default.
But fortunately, consolidation at various points in time is also becoming easier…
The newly issued guidance by the Transfers and Re-registration Industry Group clearly calls for a 14-day end-to-end switching guideline and while the standard is voluntary, it does sound like a register of who is and isn’t complying will be forthcoming.
PensionBee exists to make pensions simple and as the only U.K. pension company exclusively focused on consolidation, we have been very vocal in calling for an end-to-end pension switch guarantee, so we’re delighted to have played our part in getting consumer voices heard at the table.
And switching will become much more likely once we can compare our pensions…
Value for money analysis
Data suggests that over a third of consumers switch car insurance annually. Why? Because it’s easy to compare different quotes and switching is easy. Well if transfers can be completed in 2 weeks, then what we are really missing is some value for money analysis that can help a consumer determine whether they are in the right product or not.
Propelled by the work of Chris Sier to standardise cost disclosures through the FCA’s Institutional Disclosure Working Group, Henry Tapper is due to launch a pension comparison tool that I ultimately expect will be adopted by the likes of MoneySuperMarket and the other aggregators - where some 13 million consumers shop for financial products annually.
So if we can already see our pensions data online and we are less and less likely to accumulate pensions as time progresses, what will be the point of the pensions dashboard?
As the private sector steps up, the pensions dashboard is becoming less and less necessary
I suspect the pensions dashboard will ultimately propel all of the movements and technologies described above but let’s be clear: as the private sector steps up, the pensions dashboard is becoming less and less necessary to solve the pensions mess in the country. So hurry up, Mr. Opperman, before we all beat you to it.