The UK government’s decision to back pension dashboards and not a single dashboard in the budget should allow pensions to break out of their information silo.
The Finance and Technology Research Centre’s director Ian McKenna says the use of the plural dashboards is key because it will allow innovation with several dashboards to be built, which can crucially sit alongside a consumer’s banking information.
The chancellor, Philip Hammond, announced that the ‘dashboards’ will receive £5m ($6.4m, €5.6m) of funding in 2019/20 in his budget on Monday. The industry has hailed the decision to include state pension information especially given fears earlier this year that the dashboard project was to be scrapped altogether.
McKenna says: “It is also good that it is dashboards, plural, in the mind of the Treasury. That really is an important win for the industry. I can’t say that strongly enough. Having got this valuable support, we need to see how pensions dashboards plural can work side by side with open banking.
“Let’s get the whole of the personal finance sector properly connected for consumers rather than build silos of information.
“The reality is if we build dashboards that can deliver information side by side with open banking information far more consumers will access them. The question to ask is which do you look at more your online banking information or your online information. It is a ‘no-brainer and it should guide us in how we move forward.”
McKenna also believes that £5m should be sufficient if government and industry build on the open banking work where, he suggests, the banks have already spent upwards of £100m.
Lucy Dunbar, partner at Sackers, says: “The government’s commitment to the development of pensions dashboards, allowing individuals to see all their pension pots in one place, is a positive move, particularly given the uncertainty that has surrounded the project to date.
“With the confirmation that state pensions will be included in the dashboards, the hope is that these tools will enable individuals to better understand the overall income they can expect in retirement and what future retirement savings they may need to make.”
The budget report said: “The government is taking steps to support the launch of Pensions Dashboards, innovative tools that will for the first time allow an individual to see their pension pots, including their State Pension, in one place.
“The budget confirms that the [Department for Work and Pensions] will consult later this year on the detailed design for pensions dashboards, and on how an industry-led approach could harness innovation while protecting consumers. The DWP will work closely with the pensions industry and financial technology firms. The Budget provides extra funding in 2019-20 to help make this a reality.”
Cut out the cold calling
Separately the budget included a decision to press ahead with the pensions cold calling ban – an initiative which fell foul of the snap election in 2017 when the government decided there was not enough Parliamentary time for legislation.
So far, no date has been set for legislation or the introduction of the ban.
Kate Smith, head of pensions at Aegon says: “Finally, subject to parliamentary approval the government is going to implement the ban on pension cold-calling. Although we still haven’t got a date, we welcome this commitment and are hopeful the ban will become a reality sooner rather than later.
“The pension cold-calling ban has been long-time coming and although it won’t be the panacea, a ban will go some way to protecting people from pension scammers.”
