Member Article

A New Pensions Market – Sharing Data with the Dashboard

The issue of consumer empowerment vis-à-vis an individual’s financial data in the pension space is timely. Consumers are increasingly aware of the value and ubiquity of their data, and allowing them access to it in helpful forms, as through the Government’s proposed Pensions Dashboard.

The Chartered Insurance Institute estimates that the total savings gap between the total amount of long term money saved, and the amount actually required for people to live at what they would deem a tolerable life, is currently around £9 trillion. There is also around £3 billion in pension pots that is currently going unclaimed by consumers who have simply forgotten about their pension entitlements.

Transformational change The creation of the consumer-focused Dashboard has the potential to lead to a transformational shift in thinking in long term pensions savings. By allowing consumers to see a projection of their potential retirement income, and reconnecting them to pension pots they may have lost, the Dashboard empowers consumers with the ability to take charge of their financial planning.

Since the Government recommitted to the Dashboard the industry needs to pull together to make the final service simple to use, and robust and secure to protect the consumers it will serve.

It is vital that the Pensions Dashboard is developed and created in an independent and transparent way that allows all interested parties to have their views heard and that is a product of the Government, not just the pensions industry. For consumer trust and engagement this will be an important first test that failing may result in serious harm to the validity of the concept and a lack of consumer engagement.

Given the potential impact that the Dashboard will have on the pensions industry and for UK consumers, it is only right that Government, in the development of the Dashboard acts as an honest and independent broker ensuring that the Dashboard independent and delivers positive consumer outcomes.

Additionally, as the Data Protection Bill, which implements the EU’s General Data Protection Regulation into UK law, makes its way through Parliament, the Government must ensure that a clear and comprehensive Governance framework is in place. Providers and consumers need to have trust in the system. Pension providers, consumers and regulators such as the FCA and Pensions Regulators must be provided with a clear, comprehensive governance framework that allows all parties involved to know how and when sensitive data will be transferred, who is responsible for this and who they can turn to address potential grievances.

The industry working together This Governance must, in our view, include a mandatory requirement on all pension providers and defined benefit schemes to share the data they hold with the Dashboard. Without this, the Dashboard will not become the transformational step forward it is intended to be.

As the Dashboard is developed by the pensions industry, it’s understandable that the providers may seek to recoup their development costs. This might result in consumers absorbing such costs in higher charges and premiums.

To ensure that consumers receive the best solution, we have some requests for policy makers to taken into consideration:

• Ensure that the needs and wishes of the consumer are kept front and centre during development • Create a dashboard that is quick and easy to use • The costs of developing the Dashboard must not be passed directly onto consumers • The Dashboard must be free to use for consumers • Ensure no conflict of interest exists in the provision of dashboard services • Guarantee the consumer interest is the motivation of the service provision • Require transparency and clarity on the role that the dashboard service provider will have • A mandatory requirement on all pension providers and defined benefit schemes to share their data with the Dashboard • A clear and comprehensive governance framework be published • The Dashboard and its users be overseen and regulated by the FCA and/or the Pensions Regulator

We supports the Government’s re-commitment to the building of the Pensions Dashboard, and want to continue working with Government and the pension industry to ensure its successful development and implementation.

Yet as of now, it falls to ministers and policymakers to ensure that the Dashboard development continues in line with their end goals.

That’s why we’re recommending the points for consideration above, which lie across four key concepts: Independent, Governance, Engagement, and Commercial.

Independent: The Dashboard will be a collaborative project. It’s vital that all interested parties have their view, but it needs to be directed by the Government.

Governance: Given the requirements for consumer data privacy and security, there needs to be clear and focused governance that ensures the industry adheres to strict codes of conduct and accountability.

Engagement: The right data empowers consumers to act. The Dashboard, built with the consumer at its heart, will have a similar effect, if done right.

Commercial: The government and the pension industry will need to work parties that have expertise in processing large and complex levels of data in a secure, quick and cost efficient way, and to interface between different pension providers in the industry.

With the Minister’s announcement of a new timescale that will see the department spend the upcoming months meeting with pension providers, industry leaders and consumer groups, we believes that it is vital that these four concepts are put at the heart of the Dashboard. That way the final result will keep the consumer and their well-being at the forefront of all Dashboard activity

This was posted in Bdaily's Members' News section by Richard Howells .