Data standards published for UK pensions dashboards
Data standards have been published to create “pensions dashboards” for UK citizens.
The tool will enable people to access their personal pensions data – including about their state pension – via a single digital interface. It is is being developed by the Pensions Dashboards Programme (PDP), a team established by the Money & Pensions Service (MaPS) arms-length body.
The goals of the project include to help citizens reconnect with lost pension pots, as well as to better understand their finances and plan for retirement. The aim is to launch the tool by 2023, bringing the country in line with nations including Australia and Sweden.
The PDP’s newly published 94-page guide sets out the information that all pension providers will be obliged to supply to ensure that data is consistent.
Legislative journey almost complete
The pensions dashboards initiative was first announced in the 2016 Budget. Then, the government said the project would be launched by 2019, but progress has been slow. In October last year, the PDP updated the proposed launch date to 2023, noting this was an “indicative timeline” that will be further refined.
Indeed, the pension schemes bill, which includes a section on the dashboards, is only now the final stages of its parliamentary journey. “We are hoping for the bill to get royal assent in the next couple of weeks,” said Chris Curry, principal of the PDP at MaPS.
“The key thing for us at the moment, in order to get the dashboards off the ground, is to have the data that will flow through them. The part of the bill that makes it mandatory [on pension providers to supply data] is really crucial,” he added.
It is expected that eventually there will be multiple pension dashboards available to UK citizens: MaPS’ own (non-commercial) dashboard, plus those run by private companies. “We would expect pension providers and fintech companies, maybe even banks, to want to run them,” said Curry.
“We want pensions dashboards to be as accessible to as many people as possible,” he added.
ID verification among challenges
One of the major challenges is that the UK’s pensions market is more “fragmented” compared with other countries that already have pensions dashboards, including Denmark, Belgium and Israel, according to Curry.
“The UK has pension schemes dating back to the 1960s and 1970s still in existence and a large number of pension providers – there are something like 40,000 schemes that we need to get hooked up to the pensions dashboard. In other countries it’s in the 100s, so we have a very different type of challenge,” he said.
Looking ahead, Curry noted that identity verification was an important challenge. “I think every other country that has a pensions dashboard has some kind of national digital ID scheme or universal identifier that they use to match up individuals with pension entitlements. We [the UK] don’t have that,” he said.
A “robust, reliable and trusted identity verification service that isn’t too onerous for people to use” is essential, he added. His team plans to work with government and private sector to “make sure that we get the best ID solution – and make sure it’s flexible enough for what is likely to come in the future”.
“There will be some form of national digital ID in the UK and we want to make sure that when that arrives we can take advantage of it,” he added.
Curry also said that PDP would increase testing and consumer research in 2021. “The last thing we want to do is disappoint people in the sense that after the first time they use a pensions dashboard they never come back,” he said.
Towards open finance
The UK’s push towards pension dashboards has parallels with the efforts to encourage “open banking” where customers give permission to share their banking data with third-party providers such as fintech companies. Both approaches hope to improve people’s knowledge and engagement with their personal finances.
But Curry said there are also important differences. “Some of the people we expect to use pensions dashboards may be unaware of what relationships they have with [pension] providers, whereas with open banking it’s usually through the provider with whom they already have an established relationship that they then access open banking,” he said.
There is an opportunity to bring together open banking and pensions dashboards to get to “open finance”, added Curry. “But in the first instance, the really important use-case of pensions dashboards is just to re-unite individuals with pensions and money that they may not realise they have,” he said.
About Ian Hall
Ian is editor of Global Government Fintech a sister publication to Global Government Forum. Ian also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo. Ian has an MA in Urban and Regional Change in Europe and a BA in Economics, both from Durham University.
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I am thrilled with the idea of a pension dashboard. It currently feels like the best way to better understand how to save and budget for retirement. I temporarily relocated to the U.S. during the pandemic but cannot wait to get back to the U.K. I’ll need to give up my trusty med alert (https://www.alert-1.com/), but I’ll take a pension dashboard over that any day of the week.