How many different organisations have your clients worked for over their lifetime? And how many times have they changed address in their adult life?
There is a good chance that by combining the two numbers in your mind you arrive at double figures. Changing jobs and moving home are both common factors when people become detached from their pension savings.
The long-term nature of pensions, and the opportunity to realise its value seeming so far away, means they are not always front of mind.
People engage with their bank current accounts, credit cards and insurance policies on at least an annual basis. Changes in circumstance, address and surname are updated along the way. But a pension rarely draws people’s attention on a regular basis and the information tied to it can fall out of date.
Experian runs the Unclaimed Assets Register, which helps reunite people with their lost financial assets and providers. More than 450,000 pension pots are recorded on the database.
Although we do not hold the value of these ‘lost’ assets, typically pensions savings on the register would be worth a few thousand pounds.
- More than 450,000 pension pots are recorded on the Unclaimed Assets Register
- For a pensions dashboard to work it needs to provide a complete picture of people's savings
- An incomplete pensions dashboard may lose half of its audience
Contributions tend to be made across a handful of years before an employee moved on to their next job and started with a new pension provider.
Data and the dashboard
The overall need for people to put away more in savings for later life is universally accepted. But progress can only begin when people are engaged with their savings and understand their current position.
The government has reiterated its commitment to a pensions dashboard, however the onus is on the industry to bring a solution forward before the end of 2019.
Experian worked on the government’s prototype dashboard and my view is that it is possible to deliver the dashboard before the deadline, although there is the need for haste to complete it inside 15 months.
A successful dashboard will allow people to review their retirement savings at a glance, showing them how much they have saved already and what it would translate to at their chosen retirement date.
However, for the dashboard to do its job it is crucial it shows all people’s savings and provides a complete picture. A survey carried out for Experian found more than one in four people said they would be unlikely to return to a dashboard if it only showed some and not all their pensions, while a further 19 per cent said they were unsure.
An incomplete dashboard could lose half its audience and that could create an industry white elephant.
The power of pinning
The responsibility lies with pension providers and pension schemes to ensure the data they input into the dashboard is accurate.
This is where a great deal of work is required – there is a duplication ratio of three to one on the provider databases we have reviewed which will need to be cleaned up for the dashboard to function properly.