I have come to the conclusion, after 5 years of waiting, that the pensions dashboard is actually harming people’s capacity to manage their financial affairs.
Supposed to launch two years ago, the chances of seeing a minimum viable dashboard even by 2023 seem slim.
Consequently, the development of technology needed to allow us to see our pensions digitally is being slowed as the large data providers await instructions.
Were it not for the dashboard project, we might reasonably have expected much of this technology to be in place today.
Were it not for the pension dashboard project, open pensions might be delivering us the innovation we see in open banking.
How has it come to this?
I came to this conclusion having spent 90 minutes yesterday with Coadec and the Pensions Minister. The Pensions Minister you will know, Coadec you may not, Coadec is a voice for tech start-ups and scale-ups.
The pension dashboard was originally to have been delivered through innovatory organizations in the financial technology sector. The Treasury launched the idea in the middle of the last decade but early promise gave way to atrophy as the project was handed to the DWP. After a couple of years of neglect, when it was nearly suffocated at birth by Esther McVey, it emerged to be the first major project for MaPS. MaPS loaded the project with bureaucracy, creating a governance structure but to date no tangible product. A Pension Dashboard Program (PDP) has been set up which has moved through a number of consultations to a point where we have a timetable for delivery.
In the meantime the provision of information to this pension dashboard is now law, having been mandated in the Pensions Act 2021. However the PDP is under-resourced and has struggled to adapt to the new conditions created by the pandemic. Yesterday’s meeting was the first since the early days where I felt the power of innovation demanding more. It was refreshing and uplifting and I hope the Pension Minister felt the breath of change.
How can things change?
Although in the long-term, the Pension Dashboard will deliver, in the short term it can’t.
80% of the data needed to get to the full viable product (known by PDP as the Dashboard Availability Point) comes from 12 pension providers. This is analogous to the situation prior to the Competition and Markets Authority’s intervention in Open Banking where 9 major banks dominated the market. The CMA Open Banking Order cut to the chase requiring these large banks to make their data available.
Back in 2017 when all this happened, the big banks said it would never work, now you can hardly turn on your TV without another ad appearing telling us how one bank is surging ahead by delivering data integration through hand held devices.
Many of the arguments made by the banks are made today by pension schemes. Pensions are seen to be too complicated, pension systems to be unsuited and consumers to be too vulnerable to allow pensions to follow suit.
But these arguments can be countered by the experience of banks. Where is there evidence of internet banking and data integration giving rise to systemic fraud?
Has the availability of financial innovation through our phones led to consumer detriment in any way?
Have the major banks suffered through making data available?
The answer to these questions is “NO”, open banking is a great success and it is here.
Pension data integration has been pitifully slow , not because of pensions being complex, but because we have not had the help of the CMA, an equivalent CMA Open Pensions order , the pension fintechs (pentechs) have not been encouraged to prosper as those in payments have prospered, there has been no pension dashboards.
We are seeing innovation in pensions, the group of participants at the meeting with the Minister included Pension Bee, MoneyHub, AgeWage, Pension Lab, Plaid, Pension for Pennies, Tumelo and Yappily (apologies to those I’ve missed). All of these organisations were combined in a common message to the Minister
Without the availability of data , no pentech can prosper. Pension Bee has prospered despite being frustrated and others – including AgeWage – are following in Romi’s footsteps, but until we have easy access to pension data through application programming interfaces that allow two applications to talk to one another, pensions will continue to lag.
— Guy Opperman (@GuyOpperman) March 22, 2021
Fortunately we had the Minister’s year and though I cannot report what he said, I can report that he listened.