In its paper Fixing the freedoms: Helping smaller savers get the most out of the pension reforms, Age UK has called for the implementation of comprehensive pensions dashboards – a service that helps people view and interact with their pensions savings.
Implementation of comprehensive dashboards will enable individuals to see all their pensions from throughout their working life in one place, alongside their state pension entitlement, which should help them with their retirement planning and engagement.
In the report, Age UK made four recommendations:
* To make effective decisions about retirement income consumers will require comprehensive and consistent information to be made available on pensions dashboards;
* Consumers must have clear rights to their data, and effective supervision and regulation of pensions dashboard providers is essential – it must become a regulated activity;
* There must be universal coverage of all pension schemes for the dashboard to be fully effective, including the state pension; and
* In due course, dashboards should be extended to cover all financial assets.
It is safe to say that, to be fully effective, dashboards will need the comprehensive and consistent information recommended by Age UK. Ideally, this is what is needed to enable every pension holder to obtain a full picture of their pension landscape.
The Department for Work & Pensions (DWP) has stated that the state pension will be included and, while compulsion of data provision, supervision and regulation of dashboards is a matter for the DWP and government, Origo and other members of the financial services industry have been working very effectively since 2014 on the technology to implement dashboards.
There are four primary elements to delivering a pension dashboard, including: the data held by the providers; the verification process, to establish the person requesting the data has the right to do so; and the dashboards themselves – in other words, the interface with the consumer through their computer screen, delivered by an approved dashboard provider such as the individual’s current pension provider or bank or the Money and Pension Service (MAPS) which, it was announced this week, is beginning work to design, test and build a consumer-facing dashboard.
Finally, in between those elements, is the pensions finder service – a core component of the architecture that orchestrates an individual’s search for their pension data across all pensions companies, including state pension, and which also provides advanced authorisation and consent features that allow the individual to control which dashboards and other trusted persons, such as regulated financial advisers, can access their pensions data at each pension provider. This is the element in which Origo has been heavily involved to date.
One of the misconceptions about the dashboards is that they will automatically store individuals’ data or that the pensions finder service has the pension data flowing through it. We have heard the term ‘data warehouse’ used to describe the service.
In fact, the pension finder element of dashboards as designed simply facilitates the find request across the whole UK pensions industry and delivers pointers to where an individual’s pensions are. At no point does any of the data held by the pension provider flow through the pensions finder service – therefore, no pensions data is ‘stored’ by it. This is an important element of the security of the service.
With MAPS’ appointment of Angela Pober as implementation director for its Pensions Dashboard Industry Delivery Group, the momentum of the project should pick up pace. In terms of onboarding priority, master trusts will go first, with all other pension schemes brought on board in the next three or four years.
Digital architecture
The find process components for the project have been built and scale-tested and the delegated access capability demonstrated – the process by which individuals can give their FCA-registered financial adviser or the guidance body access to their information, enabled via a digital architecture based on open standards.
This digital architecture can be deployed quickly enabling integration with both pension providers and the individual dashboards, thereby ensuring the technology is in place well ahead of the stated timescales for providers to be onboarded.
What is important is that the technology used is proven and robust, delivers the information in a consistent format to every dashboard and has strong privacy and security controls for consumer protection.
Age UK’s final recommendation – that dashboards should be extended to cover all financial assets – is covered by the architecture currently designed to enable pension dashboards, as it is built to be extensible to ISAs, GIAs and other assets, thereby allowing individuals a far more rounded view of their financial situation.
This architecture will also benefit financial advice firms by reducing the hours spent obtaining basic information from individual pensions, savings and investment providers, speeding up the advice process and cutting costs, while enabling a more accurate and holistic view of a person’s financial wealth.
Origo remains committed to seeing the pensions dashboards launched in the quickest possible time for UK pension holders and welcomes the opportunity to work with the new director to take the project forward to its live date.
Anthony Rafferty is managing director at Origo