A remarkable level of consensus has emerged around pensions dashboards, with industry, Government and consumer groups all in agreement about the value of giving people easy access to information about all of their pension savings in a single place of their choosing. The recent closure of DWP’s consultation and the publication of the long-awaited feasibility study set out a clear and plausible way forward. But we cannot assume this revolution in pensions information is assured until three core pieces of the puzzle are slotted into place.
Legislation
Consumers have to be able to have confidence in the fact that they are seeing all of their long-term savings in one place. This will only be the case if the Government makes good on its promise to legislate for it. We will be watching the Queen’s Speech closely for the much-anticipated Pensions Bill and campaigning hard for a new law, to ensure all types of pension schemes are compelled to make the data they hold available to the service. The experience of Denmark points to what could happen without it. A country with a much less complicated pensions system took nearly a decade to reach 90% coverage on a voluntary basis. If we are all still discussing missing data in 2030, then it is fairly safe to say the project will not have been a success.
Regulation
Giving consumers access to their personal data will always fundamentally be a good thing and was rightly enshrined in law by GDPR and the 2018 Data Protection Act. However, as with many online services, proper consumer safeguards need to be put in place to ensure consumers are empowered rather than endangered. Firms offering dashboards must meet stringent standards in terms of data security, technical standards and fraud prevention. It is crucial that the FCA and industry start working on this process now to ensure that consumers are protected from the very beginning.
Governance
The final piece of the puzzle is making sure that the process of setting up and maintaining pensions dashboards is properly governed. Whilst they are a simple concept, implementing them will be complicated. Many decisions need to be taken about standards, timeframes and processes. The model proposed in the consultation is similar to the one that has been used to great effect by the Open Banking initiative. A strong, credible and independent chair will give the process rigour and allow for decisions to be taken quickly. A steering group should represent key stakeholders including government representatives, regulators, different aspects of the pensions industry and, crucially, consumer voices. Both the ABI led cross-industry project and the Government’s feasibility study have stated the consumer needs to be at the heart of the dashboard project and consumer bodies will keep everyone focussed on this goal.
Legislation, regulation and governance might not be words that set pulses racing, but they can facilitate the things that do. Providing people with their own personal pensions information in a way that they can choose and find understandable is a transformative moment that should change the way consumers view and prepare for retirement. There can be no half measures when it comes to delivering something which is comprehensive and trusted.
Matt Burrell, Policy Adviser, Long-Term Savings Policy.