In their book “The 100-Year Life – Living and Working in an Age of Longevity”, Lynda Gratton and Andrew Scott describe “the gift of extra time”: “if you are now 20, you have a 50% chance of living to more than 100; if you are 40 you have an evens chance of reaching 95”. They argue that our entire lives will need to be reconfigured to seize the opportunities arising from this extra time – affecting training, working, relationships, and financing. To make the most of our longer lives, they highlight the importance of foresight and planning.
One very practical contribution to foresight and planning is having all your pension information available in one place on-line at the click of a button – giving people an instant overview of their financial preparation for retirement. Given an average of 11 jobs during people’s careers, potentially generating 11 different pension pots, this is sorely needed. We know people struggle with keeping track of their pensions – 3 out of 5 people don’t know what they have. Such tools are available in Scandinavia, the Netherlands, and Australia but surprisingly not in the UK.
To change this, 17 organisations from across the pension industry have worked together, with the ABI as project manager, to build a prototype of a so-called “pensions dashboard”, which the group demonstrated to Government, regulators and the wider sector earlier this year.
The prototype was very well received, and it was really exciting to show the potential of this technology to the BBC’s Moneybox programme, broadcast this weekend. However, the delivery of such services cannot be taken for granted. To be truly useful, they have to be near-comprehensive so that people can see all or nearly all their pension savings and are not put off because the service is missing important information. But the UK pension landscape is extremely fragmented and includes different forms of pensions – the State Pension, final salary pensions in the public and private sectors, and defined contribution pensions. Overall, there are a staggering 46,000 pension schemes and over 80 million pension pots.
The 17 organisations so far involved look after 34 million customers and scheme members, which gives grounds for optimism about what could be delivered. But it is clear that many schemes will not make data available to an on-line infrastructure unless required to do so by law or regulation. This is where Government has to come in. HM Treasury sponsored the prototype project following Chancellor George Osborne’s commitment that the industry would design, finance and build a pension dashboard, to be ready in 2019. This sponsorship helped drive the project.
We need to see Government continue its backing for this project, and explore with us how legislation and regulation can drive adoption. Experience from elsewhere shows that services only gain widespread adoption reasonably quickly if there is a legislative requirement. Time is ticking - there are only 600 working days left to Christmas 2019 if we are to meet the original deadline. And we must deliver on the promise of pension dashboards to help people make the most of their extra time.
If you’d like to see more about the prototype project as shown on the BBC this weekend, go to pensionsdashboardproject.uk
The ABI’s Data Conference will discuss digital innovation in long term savings, pension dashboards and beyond, on 19 October. Find out more and buy tickets here.