In May, we hosted a webinar What do consumers want & expect from Pensions Dashboards?
Driving the conversation on from back-end data connectivity to what dashboards will look like, how and where people will use them and how providers will deploy them in their existing customer journeys.
We were joined by Chris Curry (Principal, Pensions Dashboard Programme at MaPS), Alastair Reed (Principal Policy Adviser, Money at Which?) and Richard Smith (Independent Pensions Dashboards Consultant at Pensions and Lifetime Savings Association & Moneyhub) and the session was chaired by our CEO Sam Seaton.
You can watch the replay of the webinar here, or read on for part one of a write up of the questions covered.
Why do consumers need Pensions Dashboards?
Alastair: Consumers need Pensions Dashboards because pensions and retirement planning are complex aspects of personal finance, often involving large sums of money and difficult decisions. Many people struggle to understand their pension holdings, where they are held, and what their prospects are for retirement. Pensions Dashboards aim to address these challenges by providing a comprehensive view of an individual's pension assets, helping them make better decisions and potentially identifying lost or forgotten pensions.
While consumers may not need to check their pension dashboard daily, it is essential to review it at crucial life moments and when approaching retirement. Pensions Dashboards can encourage better decision-making, such as when to access pension funds and whether to seek advice or guidance. By providing a clearer picture of their pension assets, consumers can make more informed choices and better prepare for their retirement years. Ultimately, Pensions Dashboards aim to increase engagement and simplify the process of managing and understanding pension funds.
What’s PDP’s perspective on the key consumer needs that the overall dashboards initiative is seeking to address ?
Chris: One of the side effects of automatic enrollment is that people may not know they have pensions or where they are located. This can be due to different company names or market consolidations. It’s so important to now help people find lost pensions, which will lead to better planning and retirement understanding, which in turn will lead to improved outcomes for consumers. Pension dashboards are part of the solution to this, though should not be the sole basis for decision making). For dashboards to be effective, information must be presented clearly, in plain English, and be comparable across different pension types. Additionally, there should be clear signposting to impartial guidance and advice. Ultimately, the goal is to empower individuals to make better decisions, leading to better outcomes in their pensions.
What else can you tell us about what the research has shown us consumers want from dashboards?
Richard: Research has consistently shown that consumers want specific features from pensions dashboards. Firstly, consumers have expressed excitement and a positive reaction to the idea of a dashboard, as it can help alleviate anxiety about their financial future and improve their overall well-being. Secondly, they want comprehensive coverage, meaning they can see all their pensions in one place. This has led to new laws requiring all pension schemes and providers to make their data digitally available. Thirdly, consumers desire key information such as total monthly income (TMI) in retirement across different pensions.
Furthermore, consumers want security, simplicity, and support without being sold to. They need to trust the security of the dashboard, have information displayed in a simple, understandable way, and receive guidance without feeling pressured to buy any products. According to Nest Insight's research, consumers respond best to pension communications that are positive, plausible, plain-speaking, and personal. Dashboards provide this personalised communication, and with multiple organisations working together, consumers can expect secure, simple, and supportive dashboards with comprehensive data coverage in the near future
A lot of focus is on the underlying data provision and PDP’s central digital architecture, what does a consumer facing dashboard actually consist of?
Richard: The pensions dashboard ecosystem is composed of numerous stakeholders operating in different layers. Layer 1 represents the consumers who can choose which dashboard they want to use. Layer 2 includes the Government's dashboard, the MoneyHelper dashboard, and various commercial dashboards such as Lloyds Bank and Moneyhub. Regardless of the chosen dashboard, they all connect to Layer 4, the Central Digital Architecture (CDA) provided by PDP. Layer 5 includes data connections into the CDA, while Layer 6 represents all pension schemes and providers. Layer 7 showcases the complexity of mandatory data provision.
When a user logs into their chosen dashboard, the CDA verifies their digital identity and passes their personal details to all connected data providers. These providers must then carry out a comparison and return the prescribed pensions information to the user's dashboard. Upon logging out, the pension information is not retained but can be exported for further analysis.
Layer 3 is crucial as it involves regulations and standards set by various entities, such as the DWP, HMT, FCA, and PDP, with the primary aim of protecting consumers. These regulations include DWP guidelines, Treasury's Regulated Activity Order, FCA's Pension Dashboard Conduct of Business rules, PDP design standards, and annual statutory compliance audits. Additionally, dashboard providers must comply with data, technical, code of connection, and reporting standards. As the dashboard ecosystem evolves, these standards will be updated to continuously improve pension services for consumers.
Can you explain to any firm considering offering a dashboard to their customers about the different FCA and PDP requirements, how they interact, and how to go about approaching them?
Chris: Firms considering offering a dashboard to their customers should be aware of the different FCA and PDP requirements, as well as how they interact and how to approach them. Pensions dashboards are a force for good, but they can also make people more susceptible to scams and fraud. Therefore, it is crucial for firms to ensure that the dashboard is secure and reliable. There are three main requirements to consider: existing legislation, FCA rules, and PDP standards.
The FCA rules specify what firms must do when acting as a qualifying pensions dashboard service, while PDP standards provide guidance on how to do it. Many firms running dashboards will be familiar with the multi-level, multi-agency approach, as they may already be complying with FCA rules and the FCA Rule Book. PDP standards set out how to connect and interoperate with the Central Digital Architecture, as well as design standards for displaying pensions information and signposting.
It is essential for dashboards to provide information in a way that users can understand and make informed decisions. To ensure there are no gaps between FCA rules and PDP standards, both organisations have been working closely with the DWP. They have recently conducted a consultation and are currently reviewing the responses to update their requirements.
Firms should listen to the consultation responses and be prepared to adapt their dashboards as regulations and standards evolve. By doing so, they can ensure that their dashboard provides a secure, reliable, and user-friendly experience for consumers while complying with all necessary regulations and standards.
Which? has been instrumental in shaping the consumer standards - can you tell us about the key things you were worried about in your response to the FCA and PDP consultations, and also where you see opportunities for firms to best serve their customers?
Alastair: At Which?, there were concerns regarding the response to the FCA and PDP consultations, as well as opportunities for firms to best serve their customers. The key concern was whether financial conduct should regulate dashboard providers and if there should be multiple dashboards from the private sector. The benefits of multiple dashboards could outweigh the risks, but only if strong consumer protections are built into the system.
Which was pleased when the government committed to a bespoke regulatory system, as existing protections like GDPR might not be sufficient. The FCA's proposed regulations, such as a ban on advertising on dashboards and restrictions on data exports, have been well-received. However, there are concerns about how easily the FCA can regulate user journeys once they are off the dashboard.
In terms of opportunities, innovation and engagement are expected to happen off dashboards, with benefits arising from various tools and services. Which also envisions long-term development for dashboards, including the inclusion of accessed pensions, costs, and charges. This would allow for better modeling and transparency, ultimately benefiting customers and providing a more comprehensive service.