Pension dashboards should be interactive and show how changing contributions can boost income to appeal to younger savers, the Association of British Insurers has said.
Research from the ABI, published this morning (January 19), found seven in 10 savers would find it useful for dashboards to show how changing their contribution and retirement age can impact their retirement income.
Currently, dashboards will only allow people to see their pension pots in one place as a read-only service.
But users want the industry to go further, with nearly 70 per cent of the 4,000 people polled, wanting to use dashboards to move money from other accounts and 65 per cent wanting to combine pots.
The research also showed that younger people are more likely to want to take further action, including using these types of modelling tools to play around with their pension and watch the outcomes.
Yvonne Braun, director of long-term savings at the ABI, said: “Our new research is clear: pensions dashboards will be very popular. But most people want to be able to actively engage with their pensions on dashboards, rather than use a read-only, static website.
“To ensure dashboards can truly empower people to engage with their pension savings, they must offer interactive features. Dashboard providers have to be able to innovate to meet the needs of younger age groups, and the legislation and the regulatory regime must allow for this.”
The ABI found dashboards were needed as people struggled to deal with pension information with 60 per cent agreeing this tool would help them better understand their pensions.
In addition, more than half of working age adults found it challenging to find their pensions information and 60 per cent said they will use a dashboard to manage their pensions better.
The government and regulators are expected to consult on pensions dashboards regulations in the coming weeks.
But the ABI said this legislation should be “future proof” and that a one-size-fits-all solution will not work – a range of innovative features is needed to support different user needs.
Other features could include signposting to pension advice and guidance and integrating pensions data with other supporting services. This would encourage and empower savers to manage their pension savings.
Rachel Rowlinson, research director at Britain Thinks, which conducted the research, said: “Across our research on consumer financial behaviours we find there is high demand for easy-to-use digital tools that help demystify products.
"This research has evidenced that pensions dashboards offer a real solution to significant issues consumers face in accessing, understanding and managing their pensions – which means there is a genuine appetite for use.
“The key challenge moving forwards will be to ensure that consumers are not only logging in as a one-off to look, but also being nudged to build habits around engaging with their pensions more consistently, and taking active steps to plan and manage their financial futures.”
Providers are expected to make data available to dashboards from 2023.
amy.austin@ft.com
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