Furthermore, in addition to having an overview of their pensions, which will enable them to see exactly what they have built up and what more they need to do to achieve the retirement income they aspire to, the dashboard will help consumers locate lost pots, and make informed decisions on retirement planning.
It is a significant step forward from where consumers (and their advisers) find themselves now and the opportunities that it delivers to the industry are tangible.
| What the Financial Advice Market Review recommended |
The proposal is to create a consumer-friendly “digital interface”, which will display information about all of an individual’s pension savings in one place. In pages 47 and 48 of the Financial Advice Market Review final report, it states this data would ideally be retrieved directly from providers and would not require lengthy data input from individuals. It would update in real time and contain projections of pension income based on different scenarios. The FAMR report recommends having a pensions dashboard in place by 2019 |
For advisers, there will be increased opportunities to bring on more clients, potentially providing assistance through digital or online services if that is seen as an appropriate model for their business, as well as providing financial advice.
For the pensions industry, there is an opportunity to build greater confidence into the market around pensions’ ability to deliver long-term results for consumers.
Building a dashboard
So what’s needed to build a pension dashboard? There are four elements required for a dashboard to work for the consumer.
■ First, the dashboard itself
There is debate at the moment whether there should be one all-encompassing dashboard or whether various parties – for example, pension providers, schemes and their administrators, trade bodies and consumer champions – could build their own dashboard, provided with all the relevant information and data by a central engine, to deliver a consistent, secure and low-cost service.
■ Second – identity verification
This is vitally important and has to be 100 per cent right if consumers are to trust and have confidence in using the system and to keep out scammers and fraudsters. A pension dashboard could present an opportunity to gain access to the details of people’s lifetime savings, so security is paramount.
There are highly secure systems like the Government Gateway, which set a practical precedent for this type of verification process.
■ Third – a central data-facilitating hub
This central engine will need to receive the request from the consumer, via a dashboard, check it is verified, then go out to all providers of pensions across the industry (pension providers, schemes/administrators, self-invested personal pensions, platforms, master trusts, and including the State), to request any data they have on the individual’s pension entitlements, including a valuation or accrued benefit.
The engine will receive those various pieces of data, package them up and send them in a format that is readable on the dashboard. This cuts down on cost and complexity and improves efficiency, thereby enhancing consumer benefit.
■ Finally – pension company input
