A good reason why pension dashboard infrastructure should be open … any payroll provider could then include pension information directly on payslips. I expect that is far more effective than signposting a single government provided dashboard
— alan chaplin (@achaplin71) December 27, 2019
This may be the most “on the money” tweet I’ve read in 2019. I’ve included it in the Pension PlayPen input to the FCA’s Open Finance initiative. I’m going to expand on its implications here.
One of the risks that the FCA identifies is “closed loops” where data is exchanged between a small group of data managers in something that could be deemed a data cartel. I fight shy of calling it a cartel as I get lawyers from industry bodies dropping me notes, but that’s where the risk from closed information loops takes us.
A dashboard for the providers, by the providers ensures we see what providers want to see. We are told that this cannot happen because the Government has entrusted the Money and Pension Service with the job of setting up and running a dashboard implementation committee. This committee exists, though what can do right now is anybody’s guess.
This implementation committee is supposed to deliver the Government’s vision of a pension dashboard “ecosystem.
it forms part of the pension dashboard governance ecosystem
And all this has arisen out of four years of consultations, consultation responses, prototypes, launches and now a Pension Bill. The upshot of all this is that we may have legislation to mandate data managers holding our pension data to make that data available to the dashboard “ecosystem” by 2025.
When two sevens clash
When Joseph Hill had a vision of an impending apocalypse in 1977, the result was Culture’s album When Two Sevens Clash. The apocalypse never happened but 1997 – the year of the “punkie reggae party” – changed the direction of pop music till today.
I predict that 2020 will be the year that the two competing visions – for a closed loop and for open pensions – clash.
And on that implementation team are those for a controlled close loop and those who want to see open pensions and they will clash as well.
Let’s empower payroll
As with the DWP’s other data sharing initiative, the simple pension statement, the dashboard is at risk of being bogged down in yesterday’s thinking.
The “big idea” for delivering single pension statements is to provide them in distinctively coloured envelopes. The big idea for the government Dashboard, is to embed it in an ecosystem so complete that nothing can possibly go wrong.
Meanwhile people are retiring and doing so with incomplete information. People have no way of finding pensions other than through google and some hand cranked search engine on the DWP’s website. The PPI estimate that £20bn of our pension savings lies unclaimed.
Pension pots proliferate, the DWP estimates by 2050 there will be 50 million abandoned pots, unless some way is found for us to find them and bring them together.
Support is minimal, depending on what survey you read, between 80 and 94% of us won’t pay for financial advice, Pension Wise reaches only 10% of its target audience and most of them are already advised. For most people, advice on what to do with the pension pots comes from friends and family and from the world wide web.
In this denuded landscape, we should look for help where it is available. Alan Chaplin is right to look at solutions that can deliver information today, rather than wait for another year of wrangling from the open pensions and closed loop factions.
Payslips are more read than a Government Pensions Dashboard will ever be. If payslips are allowed to deliver the basics of pensions then they will be in people’s line of site every pay period. Here, thanks to Robert is a vision of the future that is happening today.