I’m doing a call this morning with some pension strategy people , some from Fintech and some representing “old tech”. It’s a timely discussion as the Scottish National Party limbers up to put a spoke in the wheels of an open dashboard.
The SNP has tabled an amendment to the Pensions Schemes Bill which would stop any commercial dashboards from using the infrastructure put in place by the Pension Dashboard Program for five years. We should not underestimate the very real and passionate concern from those in parliament that the pensions dashboard is used responsibly and is not hi-jacked by scammers or by those who put profit before people.
“But what does it profit the people, if by fleeing from imagined evil , they bring greater evil upon themselves?”
I have respect for the SNP and for Jeannie Drake and other peers that seek to protect us, but I recognise the equally good intentions of those on the other side of the argument; by which I mean those who suppose that putting information in a timely way , in the hands of those needing to take decisions, is vital for their financial wellness.
We often talk of “de-risking” pensions, which means passing risks to private individuals, what is being done to de-risk pensions for the new risk-takers?
De-risking pension pots.
I recently received a message from a friend who has done more than most to improve the flow of information to ordinary people going about their business using technology which five years ago would have been considered advanced.
The reason I take the trouble is because I care about people not being able to see their pension easily when they are required by law to contribute into one (well most people fall into this camp now). My role .. is to represent the FinTech community and to hold the PDP’s feet close to the fire when producing a deliverable fit for purpose for the ultimate recipient – us! That is, everyone with a UK pension of one kind or another!
However, I now feel I am part of the problem. Why? Because I really don’t think it is too much to ask the PDP to make a few more data fields mandatory on day 1 and to stage the roll out of the PDP so that the PD is deployed with “low hanging fruit” catered for asap and progressively rolling out over time to more and more difficult cohorts until the entire tree is sorted.
So far these requests have fallen on deaf ears. At the moment the PDP are taking the ability to service everyone with the PD very seriously and interpreting this commitment to mean that until we can provide everyone in the UK with access to a PD we should not commence any form of live roll out.
These are not the words of someone who intends to facilitate scamming, or even the commercial interests of pension providers and their retinue of advisers. These are heartfelt words of a consumerist who is seeing the dashboard obstructing rather than displaying , the information we all need to take decisions.
Which comes first the dashboard or the data?
My friend continues
The next issue lies with the data. Upon roll out to all there are three mandatory data fields required:
- Pension Provider Name
- Pension Provider Contact Address
- Forecast income the pension is most likely to generate upon reaching retirement age.
I have requested that three more fields be added on day 1 as mandatory:
- Current value of the pension for all pensions where there is a current value – all DC pensions for example
- Charges associated with the pension provision
- Current holdings in terms of where the money is invested – preferably with a code that can be used to map to a fund fact sheet or similar such information that is legally made available by all funds
Don’t get me wrong I would like many, many other data items but the above six even I could live with on day one.
It is quite extraordinary that the current plan is to give people details of their prospective pension pot but not their current pot value. To give them an estimate of its purchasing power as forecast income, but not to value their pension pot.
Can we be trusted with our own data? Perhaps not!
It is over six years since we first heard that we would be allowed to choose how we could take our pension savings and in that time we have failed to provide the technical architecture that we have promised savers – a dashboard which can help people find pensions and take decisions on how to plan for the future.
In the meantime, we have seen a revolution in open banking that has seen the integration of applications using what is now standard technology (the API). Standard that is – for banks. In pensions , the lessons of open banking have not been learned. The Open Finance initiative is frustrated by providers who frustrate the free-flow of data and create obstacles to us seeing our data in digital format. Despite the GDPR, data is still being blocked “to protect our best interests”.
I will finish with the words of CEO Romi Savova, delivered to the FT with regards the decision not to let us see how much we are paying for pension management on the simpler pension statements.
“PensionBee, a pension consolidator which adopted simpler statements in 2019, including charges in pounds and pence, said including fee information was “entirely do-able”. “Consumers aren’t fools,” said Romi Savova.