Savers may only be able to locate six out of ten pension pots on the incoming pension dashboards unless the industry starts to improve data quality, PensionBee has warned.
A pension dashboard is a digital interface that allows savers to see all their lifetime pension savings in one place, with the data being retrieved directly from providers and updated in real time.
But analysis of current pension data quality by PensionBee, published today (February 10), hints that early users of dashboards will be disappointed as not all of their pension pots will be available due to data not being ready in its current form.
The pension consolidator’s analysis was based on 6,500 instances where a provider was contacted in search of a client’s pension between July and November 2019.
It looked at the number of pots that could be matched on first try, those that could be matched based on partial identification, and those that could not be matched despite the belief that a pension pot exists.
The information used to identify a client's pension pot included name, date of birth, national insurance number and address.
According to the analysis, 61 per cent of pots (4,056) were found first time and 13 per cent were partially found and had some elements of data missing.
A quarter (26 per cent) of pots were not able to be located using name, date of birth, national insurance number and address data.
Newer master trust providers, such as The People’s Pension and Nest, were better at locating pots with 79 per cent found on the first go while 6 per cent could not be found at all.
This compared with 52 per cent of pensions being matched on the first attempt at older contract-based pension scheme providers.
The government plans to use a digital ID to identify a consumer’s pension for the dashboard.
However, this is not likely to be available in time for the launch of the dashboard in the next few years. Therefore the dashboard will likely provide data to consumers based on matching, which use name, date of birth, NI number and address information.
Clare Reilly, head of corporate development at PensionBee, said: “By the time it launches, savers will have waited more than 20 years for a dashboard so it needs to be fit for purpose from day one.
“This data should be a huge wake up call to the pensions industry. Those with legacy books of business, spread across systems and geographical locations around the country need to finally get their houses in order. The reputation and future of pensions depend on it.
“Whilst they do this only a staged approach can avoid what would otherwise be certain delay. If we want to launch with the best quality data, it’s clear master trusts lead the way.”
Last month (January 23), pensions minister Guy Opperman urged providers to start preparing their data now to ensure it is secure, accurate, and user-friendly before dashboards are launched.