Government pension projects rarely succeed and where they do succeed – it is because the public and private sectors find a way to work together. There are exceptions – the state pension and unfunded public sector schemes are pretty well 100% a Government initiative and the PPF is getting less rather than more reliant on the private sector.
But when it comes to the pension saving market – Government has not found a way to do it themselves. The public sees pensions – as the Sun sees pensions – as a witch’s brew in a pot!
Recent initiatives have had their moments – TPAS being an example – but generally Government does not do pension guidance or advice well and there is little expectation that it will do a much better job with the dashboard between now and 2025 than it has since 2015.
The SFGB needs our support but it is a backstop
I don’t know anyone who is remotely excited by the Single Financial Guidance Body and I don’t see Pensions Wise as being much more relevant under it than it was in the hands of MAS/TPAS and CAB. The spaghetti soup of acronyms tells us just how little impression Government has made on our day to day retirement thinking.
We expect that the dashboard will be controlled from within SFGB and judging from the people who are being assembled as dashboard experts – we can be sure that it will be very much “not for profit”. This is a holding position, but the Government knows very well that once data is available to us through pension finder services – then the private sector will be very interested indeed.
Data is money – it’s as simple as that. The best that Government can hope for is a well -regulated market where data integrity is upheld and advice and guidance is monitored.
The SFGB will be powerless to stop the commercialisation of the pensions dashboards, nor should it try to.
The SFGB should encourage private sector innovation.
The Government will quickly work out that the private sector is quite capable of finding pensions for itself. If the Government wants to give a centralised contract to one pensions finder service, then people will avoid using that service and scrape their own data. That is because people want to avoid paying through the nose for data , being dependent on a single service provider which might prove unreliable and because people will want to get on with things at their pace, not that of a third party.
So – if we get a single pension finder service – procured at great time and expense , the chances are that the current pension finder services – which are little more than scraping – will simply carry on – with all the data risks that come from sharing passwords and so on.
Sooner or later, people will get tired of waiting and they will get angry with Government for not delivering. Think Crossrail.
And this will bring the SFGB to the public attention and not in a good way. It will become the scapegoat for non-delivery, even if it had no part in what came before.
Plan for the future not the past
The future is digital, it is open source and it is handheld. The deep future may be quite different but for the next five years we can see the direction of travel. It is not the direction that the Pensions Dashboard is taking, that is a direction that looks back to the first 20 years of the century (and we will be looking back by the time we get anything).
The future is represented by Pentech and the dashboard should be designed for and by people who are familiar with open source data. Government should stay well out of the way. It’s job is to ensure that the data standards are common and to root out the rotten apples, it is not to stand in the way of change.
Similarly, what the dashboards show should not be a matter for Government (other than that trading standards should apply). The old distinctions between guidance and advice need to be reviewed so that everyone can make decisions about what to do with their retirement funds with confidence.
The future is not going to be about sitting down with an adviser for two hours, it’s going to be about user journeys that make sense to ordinary people and take them to guided outcomes that are generally right. We will revert to a default culture which will replace pure collectivism with rules of thumb.
The future belongs to the brave
Necessarily, those who will be at the forefront of dashboard innovation will be entrepreneurs. It is impossible to imagine that Government, the ABI, the PLSA and the PMI are going to drive change.
The change that happens will be driven by self-interest which is what drove Isambard Kingdom Brunel and James Watt and it’s what has made Apple and Google and Facebook change the way we do things. Government can only be responsive to change – it cannot be entrepreneurial – nor should it.
This may sound disruptive and I expect that many (including the many who packed Prospect’s office to opine on the dashboard) will see me as precisely the kind of person who shouldn’t be allowed near a commercial dashboard.
I love Origo’s vision of the commercial dashboard – it tells me just how far the pensions industry is wanting to keep this dashboard to itself!
Here is the dashboard that I put together with the Sun’s Mr Money – sorry about the lack of digitality in either image!
There comes a time when people just get fed up with waiting and all the fannying around and just want to get on with finding their pensions and spending them.
That time is now.
We need commercial enterprises to help ordinary people to get their money together and get it back. We do not need more guidance from Government or governance from the Guidance Body.
Those of us in our late fifties are growing into retirement with practically no help. It is time we got it. The dashboards can help but they will only work if they are commercial.
No Government initiative is going to work on its own, Government must now allow the private sector to get on with satisfying the public’s thirst for information, guidance and advice.
Exploit is the wrong word but meeting demand is what we are about and there is no doubt that the public demand a commercial service that helps them retire properly.