As the UK begins to transition into the next phase of the pandemic we now need to look collectively at what can help women build their financial resilience
While some people were lucky and able to save throughout the pandemic, for many of us it exposed our financial weakness and with furlough ending at the end of this month (September), as an industry, we need to do more to help our customers connect with their savings, investments and pensions.
Furthermore the FCA has been working with the financial industry on the growing number of vulnerable customers we need to help.
The FCA definition of a vulnerable customer is ‘someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care’.
One area where we are seeing huge issues is lost or dormant assets.
Many people - both male and female - have lost track of savings, pensions, bank accounts and all types of financial products. We estimate more than 19m people in the UK have become disconnected from financial services products.
What is needed is industry and technology to come together to break down the barriers.That is one big number and, with a collective value of over £50bn that remains unclaimed, we need to start thinking big to solve this problem. Pensions are one of the biggest problem areas.
Many of us have different pension pots linked to each company we’ve worked for.
Industry data suggests there are currently 52m adults in the UK who have 130m pensions supplied by more than 40,000 private, public and state pension schemes.
The identification of disconnected pension pots among such a huge number of schemes is some task and one that is occupying the pensions dashboard.
The pensions dashboard scheme was first announced in the 2016 Budget and was set up to be a ground-breaking online service where we could all see our pensions in one place; it was due to be introduced by 2019.
However earlier this year it was announced this had been pushed back to 2023 and even then, is unlikely to be fully operational from day one, with the main stumbling block being the lack of data needed to populate the dashboard.
The idea of dashboards is not new but if the pensions dashboard is anything to go by, they are complex to put together. But get it right and financial dashboards are a very neat solution.
They have the potential to bring huge benefits for people by bringing together all the savings, pensions and investments in one place. A dashboard would not only help people keep track of their money, but also put it to better use once they have found it.
What is needed is industry and technology to come together to break down the barriers mentioned above. I believe we can help the millions who need it, now.
Giving customers a single, centralised, place for them to seek lost money represents the ultimate evolution for customer reconnection, rather than each firm individually providing this self-service functionality.
Collective action
If we collectively bring together the historic data, it will empower customers to resolve multiple problems through a single channel, saving them time, money, inconvenience and stress - factors which often contribute to customers putting off the act of reconnecting.
Furthermore, as an industry we need to work smarter to adopt a technology-led approach which allows consumers to quickly and easily self-serve.
This will give firms a chance to reconnect with lost customers who have historically been reluctant to respond to traditional outreach methods, such as “unsolicited” letters and phone calls.
A digital-first approach also ensures firms remain connected by providing up to date and secure contact channels.
While this might seem counterintuitive from the perspective of a firm which benefits by holding large unclaimed or dormant balances, the increasing scrutiny of regulators such as the FCA is creating a drive for fairer treatment of longstanding customers.
At Gretel we believe we have already come up with the solution and keen to work with the industry to solve this big issue, and are particularly keen to help the 27m adults in the UK the FCA has identified as vulnerable.
Any solution which supports improved customer outcomes will almost certainly be well received by the regulator. As the FCA guidance states: “Ultimately, we want to see firms doing the right thing for vulnerable consumers and embedding this in their culture.”
For this to work we need digitisation and collaborative action from the industry to deliver. As an industry we now need to put dormant assets to work.
Duncan Stevens is chief executive of Gretel
