The Financial Conduct Authority’s (FCA’s) and Pension Dashboards Programme’s (PDP’s) most recent consultations cover the regulatory framework for dashboard operations and the design standards to be used by firms.
As an alpha partner to the PDP and the first commercial dashboard provider to connect to the CDA, we’re making our response to these consultations public:
FCA’s consultation (CP22/25) on the proposed regulatory framework for operators of pensions dashboards, referred to as Pensions Dashboard Service (PDS) firms
PDP’s consultation on draft mandatory design standards setting out how data must be presented to ensure a consistent and good user experience on pensions dashboards.
We welcome and support the FCA’s and PDP’s proposals, especially in four critical areas which will really help consumers:
Dashboards Locations
Consumer Protection
Pensions Education
User Reactions
In this post we’ve laid out our response to these specific areas.
Additionally, we polled 100 people in our Alpha Test group (with a 65% response rate) as part of a sense check of the proposals, and our own response.
We’ll look to deepen this consumer research during the spring as part of our preparations to apply to the FCA to become a regulated Pensions Dashboard Service (PDS) firm.
“The FCA’s and PDP’s extensive and detailed proposals set a welcome high bar for organisations wishing to offer their customers a pensions dashboard.”- Dan Scholey Chief Commercial Officer at Moneyhub
1. Dashboard Locations- “Multi Dashboards are a reality”
We believe, like the FCA, that collaboration is key to the success of pensions dashboards and encourages a diverse market of PDS firms.
Too often pensions dashboards are referred to as a singular entity but this will not be the case here in the UK.
At Moneyhub we’re already working with firms who see the benefits - to their business and users alike - of creating their own dashboard. While unusual for a country to take this approach, the FCA’s decision to encourage industry collaboration will have numerous benefits.
Dashboards will be easily accessible, allowing customers to conveniently check their potential retirement income, and importantly, make informed decisions to benefit their later life.
Our sense check poll research showed that consumers understood the benefits of a commercial dashboard located within the app of a trusted brand. Indeed, 60% said they would want to use a commercial pensions dashboard, broken down as follows:
33% would use (one of) their pension provider’s dashboard(s)
17% would use their bank’s dashboard
10% would use another provider’s dashboard (like a wealth app provider)
40% would use the Government’s dashboard
Trust was a big reason behind this with one respondent saying:
“I trust my pension provider on pensions - when I think of pensions, I think of my provider … it’s where I’d expect to see my pensions … I’d expect my provider to have a dashboard.”
While different consumers will trust different brands, the FCA’s outsourcing proposals will allow different types of organisations whether that’s a pension firm, a bank or an investment provider to launch their own pension dashboard.
And many are already coming to Moneyhub in order to do just this, leveraging our technology to offer their own dashboards, meaning consumers will be able to access dashboards wherever they feel most comfortable.
“At Moneyhub we’re already working with industry leaders wanting to create their own dashboard to ensure their customers benefit from the programme and achieve better outcomes. The FCA’s decision to encourage industry collaboration will have numerous benefits.
Dashboards will be easily accessible where consumers already are and among financial products they understand. This allows customers a convenient touch point in apps they already use to check their potential retirement income, and importantly make informed decisions to benefit their later life.” - Dan Scholey Chief Commercial Officer at Moneyhub
2. Consumer protection
The FCA is proposing a suite of mandatory simple disclosures to help with dashboard users’ understanding and expectations: for example, explaining that the pension income figures shown are indicative, are shown before any income tax is deducted, and with numerous options not shown, for simplicity (such as taking an optional tax free cash lump sum).
In particular, PDS firms must protect consumers from the harm of poor decisions by prominently discouraging users from making any financial decisions based solely on the rather limited pensions information they see on a dashboard.
We tested this with consumers and found that 50% of people want to see these key messages before they have seen their pensions information on their dashboard, and 50% after. We will continue iterating our testing to ensure these important messages land at the most important moment for consumers.
“We have been impressed with the high bar set by the FCA’s and PDP’s extensive and detailed proposals. As market leaders, Moneyhub strongly supports the proposals, but we encourage others to also add their voices to these critical consultations – which is why we are publishing our detailed thoughts on the key topics now.” - Dan Scholey Chief Commercial Officer at Moneyhub
3. Pensions education
PDP’s draft design standards recognise that consumers want to see a total income figure, and that they’ll calculate it themselves (sometimes incorrectly) if a total isn’t presented on a dashboard for them. However, PDP’s consultation rightly highlights that there are material differences between pension incomes from defined benefit (DB) and defined contribution (DC) pensions.
PDP’s proposal is that PDS firms should be allowed to calculate and display a total pension income figure, but only after the key differences between different types of pensions have been explained to the dashboard user, relevant to their particular career and pension history. We support this concept in principle and tested how well these particular aspects of the design standards might work in practice.
We asked our consumer research participants to rank, on a scale from 1 to 10, how much they would want to see a total pension income figure (where 10 = “I’d really like to see a total pension income figure and I’m prepared to learn about my different types of pensions first”).
69% of respondents placed a high value (scoring 8, 9 or 10) on being able to see a total pension income figure and would be keen to learn about different types of pension, provided it’s done in simple terms, with attractive media such as videos and graphics.
4. User reactions
FCA’s consultation suggests “consumers would find the customer journey frustrating if it was limited to the core ‘find’ and ‘view’ activity”.
We agree. Having found and viewed their pensions, 60% of Moneyhub’s users surveyed indicated that they had questions or would wish to take some next steps, with which they will need support.
We strongly support the FCA’s proposal to allow authorised PDS firms to also offer “post-view services” (PVSs). Crucial amongst these will be the user’s ability to export their found pensions information from their dashboard into, for example, their dashboard provider’s existing pensions modeller. In addition, next steps suggested could be exploring consolidating their pensions or arranging a conversation with the government’s free PensionWise service.
We presented our sample of users with a menu of 20 potential “post-view services” (PVSs) and asked them to pick the top 5 they would be most interested in, after finding and viewing their pensions on a dashboard. The 5 most popular choices were:
Investigate any missing pensions
Compare to a target income
Resolve any possible matches
Change my contributions
Set a target pension income
These PVSs were all about “understanding if I’m on track”. Support with getting any missing or possible pensions sorted was a priority to ensure the dashboard is giving the user a complete picture.
Then setting, and comparing against, a target total pension income to aim for. That could be either a national target (like the Pension and Lifetime Savings Association’s (PLSA) Retirement Living Standards (RLS), or a personalised target, potentially based on current spending data available through Open Finance data.
Paying in more contributions, to reach their target pension income, was also a popular PVS, e.g. linking to payroll systems to request an increase in regular contributions.
The next most popular steps were about seeing a more holistic view, i.e. can/should I bring my pensions together? Can I see them alongside both my other money, and my partner’s? Can I model scenarios?
Further down the list were steps around getting help (advisers, peers, friends, and colleagues, pensions reference material/websites, and specific pension schemes and providers) and making updates with schemes (e.g. beneficiaries and investment choices).
We will use the above, and wider and deeper, consumer insights to understand which will be the highest priority PVSs for consumers, for applicant firms to consider first.
“Dashboards will revolutionise the service which can be offered by the apps from banks, pension providers and others, and therefore the outcomes that consumers can achieve with their savings. This is an opportunity for providers to better equip their customers by understanding their needs better. It’s great that we now have FCA’s and PDP’s proposals for how dashboards will be regulated and how they must look.
“We encourage all senior leaders right across the pensions world to engage in this key debate.”- Dan Scholey Chief Commercial Officer at Moneyhub
Find out more about Pensions Dashboards and Moneyhub's innovation in this space →.