Dave Tonge, CTO
Our CTO Dave Tonge spoke with Moneyhub’s new Pensions Strategy Advisor Richard Smith about pensions dashboards and why they’re so important
Richard Smith
Hi Richard. A warm welcome to Moneyhub. You led the development of the Government’s data standards for pensions dashboards. And now you’ve come to Moneyhub to help us build these really critical pensions dashboards for our many customers and corporate clients. That’s very exciting!
Let’s explore exactly what pensions dashboards are, but first, why do you think they’re so important?
Thanks Dave – it’s really great to be here: I’m already loving the energy and drive of my new Moneyhub colleagues.
People’s need for pensions dashboards isn’t new. The Government first tried to set one up 20 years ago, and several other European countries have had dashboards for decades – this isn’t just a UK issue; it’s global.
Hugh Smith
The problem is that the pensions system was designed for people like my dad, who only ever had one job: 40 years with the Post Office, followed by 30 years of retirement with his Post Office Pension, plus his State Pension of course.
Now contrast that with me: I’m nearing the end of a classic Gen X career: I’ve moved jobs several times; I’ve been outsourced; and now I’m contracting – you know, the usual warp and weft of someone in the modern labour market.
Katherine Smith
Not many people these days have a “job for life”. And the churn in the national workforce is only increasing through the generations, isn’t it?
Spot on – my eldest daughter, who’s 24 this year, has already had more jobs than I’ve had at 54!
So what does this all mean for people’s pensions?
Well, in a system where each employer chooses the pension scheme for their workers (a bit like a parent chooses the school for their children), it means, as you move jobs through your career, you collect pensions with all sorts of different pension schemes and providers.
I’m a typical example. I have multiple pensions, with loads of different providers. Some of my pensions are Defined Benefit (DB), where I know roughly what I’ll get, and others, from later in my career, are Defined Contribution (DC), where it’s all about: has enough money gone in to give me the sort of income I’ll want once I stop work?
Everyone has their own, unique, collection of different pensions - their “pensions back story”.
You sound pretty sorted, Richard – why is this such a big deal for people?
Well I’m a pensions nerd, Dave – way off the scale! For the majority of people, there are two really key basic issues:
1. Keeping track of who your pensions are with. In 2018, the Pensions Policy Institute, or PPI, published research showing many people lose track of where their different pensions are. The PPI estimated Britons could’ve lost as many as 1.6 million pensions with a total value of £19.4 bn.
Around 6% of uncrystallised pension pots are held by gone away customers
And that’s just DC pensions: if we add in DB, I think the figure could be at least double that, at £40 bn, or more. This is awful – this is people’s money which should be going to millions of older Britons, but just isn’t.
2. Knowing if you’re going to be OK in retirement. I’m also the Pensions Dashboards Consultant at the Pensions and Lifetime Savings Association, or the PLSA. In 2018, PLSA published research showing that 80%, yes 80%!, of people don’t know if they’re on course for the retirement income they need and want.
Across the whole UK working age population, that’s 30 million people! So even if people know where their different pensions are, the vast majority don’t know what their total income in retirement might be, or if it’s going to be enough to live on.
You’re painting a pretty bleak picture, Richard! So come on, how are pensions dashboards going to help sort this all out?
They’re going to address the two key issues I’ve described – and in doing that, they’ll help build people’s confidence so they can move on and do more with their pensions.
SEARCH: On the lost pensions issue, dashboards will Search securely for your pensions, using a new digital service being developed by the Government.
SHOW: On the “Am I going to be OK in retirement?” question, dashboards will Show you an indicative summary snapshot of your pensions – this will be a standard display, defined by the Government, so that all dashboards show the same thing.
SUPPORT: And then, for those customers who want to go further, Moneyhub’s dashboards will Support them with whatever next steps they want to take.
“Ultimately, dashboards will all help grow people’s understanding and confidence, taking action where appropriate, and, over time, really helping them become proud of their pensions.”
That sounds great, Richard, and like it could potentially revolutionise the pensions world. I’m sure pensions providers and others will have lots of questions about what this might mean for them - let’s come back to this very soon.
Definitely. In the meantime, to find out more sign up for our pension insights using the form below. Keep visiting as we’ll be publishing lots more detailed information about Moneyhub’s pensions dashboards product suite, and how clients can white label it.
