A summary of our response to the FCA Consultation CP24/4 on Pensions Dashboards

We are pleased to share a summary of our feedback in response to the Financial Conduct Authority's (FCA) further consultation on the regulatory framework for pensions dashboard service (PDS) firms (CP24/4). Our feedback underscores our commitment to improving the pensions landscape for consumers and exemplifies our ongoing engagement with key stakeholders.

Aligning with Draft Perimeter Guidance

We are pleased to confirm that the Draft Perimeter Guidance (PERG) aligns well with our expectations and supports the primary delivery models envisioned by Moneyhub, which we have actively discussed in prior consultations with the FCA. This alignment is particularly seen in FCA’s Illustrative scenarios 1 & 2, which reflect the operational blueprints that we believe will best serve the market’s needs.

Advocating for Consumer Control through Choice Architecture

In the spirit of enhancing consumer empowerment, we recognise the potential benefits of the proposed Choice menu architecture. However, we stress the importance of thorough consumer testing of screen and app designs by prospective PDS firms. We propose that the final FCA Handbook Rules maintain enough flexibility, allowing firms to effectively balance consumer ease of use with necessary consumer and data protection controls.

Addressing Post-Launch Regulatory Adaptability

Based on the universal experiences from European pensions dashboards, we highly recommend an adaptable approach post-launch. Recognising the importance of continual evolution through feedback, Moneyhub urges the DWP, FCA and MaPS PDP to embrace regular updates to their respective Regulations, Handbook Rules and Standards respectively.

The Critical Need for Pace

We are concerned about the delayed timelines for publishing finalised PDS Handbook text and subsequently opening the PDS authorisations gateway. It’s clear from international implementations, especially from Norway, that consumers need and want to use commercial pensions dashboards as soon as possible. 

Working with the other member firms in the newly formed Dashboard Operators Coalition (DOC), Moneyhub is aiming to collaborate with the DWP, FCA and MaPS PDP to help bring a number of pensions dashboards to UK consumers as soon as possible.  A key start in this process is the DOC’s 8 Step Pathway to a Flourishing Dashboards Universe policy paper developed in April 2024.

Responses to FCA's Specific questions

In further sections of our response, we address specific questions posed by the FCA:

On Perimeter Guidance: 

We are pleased to see the FCA’s Draft Perimeter Guidance (PERG) for operators of pensions dashboards.  It is as we expected and supports both the main delivery models Moneyhub envisages emerging in the market (which we have previously discussed with the FCA).

On Choices Architecture: 

The FCA’s choices menu proposals could potentially work well for consumers, but much will depend on the results of detailed consumer testing of screen / app designs by potential PDS firms, and .

We agree that a user must have knowledge of how their data will be passed on as they move between features in the pensions dashboard space. They must be able to remove that consent at any time via the centralised consent space mentioned in the design standards.

It is important that there is sufficient flexibility in the final FCA Handbook Rules to allow PDS firms to strike the right balance between friction and ease for onward customer journeys.

On Exit Communications: 

We propose streamlining communications to avoid overwhelming consumers, based on our research, which shows clear consumer understanding during entry and exit phases of PDS interactions.

Specifically, we propose the removal of the need for messaging between pensions dashboards and any contact method provided by administrators. As stated in the consultation draft, this movement out of a pensions dashboard is apparent from the context in which the link was presented. There will also be other signs, such as: a change in branding, tone of voice and many others - including a new tab or window depending on the user's settings.

We agree users should be aware when they are travelling between different areas of regulation. However, evidence shows that users are already aware of this movement.

On Delegated Access: 

We recommend postponing decisions on these until there is more clarity on the functionalities to be delivered by MaPS PDP.

We would like to encourage further regulations to provide definitive understanding of when something is mandated, and the precise details of all involved from all groups involved. This should be clearly defined vs when something is optional and which other applicable standards would be applied.

The scenario of delegated access is one - we do not yet have an understanding of the journey a user will be expected to take and so we cannot pass comment on this proposal.

On Data Export:

We want a fair, easy to understand and use solution for end users of pensions dashboards. For some that will be continuing a relationship with their existing provider. Given the guidance on messaging included in this consultation, we think the user would have the opportunity to explore other competitive options should they wish to do so.

We would like to emphasise that seeing Pensions on their own is not very helpful for most people and definitely not helpful for the people who are most likely to need a pensions dashboard in the coming years. People need to be able to see their pensions in the context of other investments and property as well as their lifestyle and spending habits. Our testing has shown that the ability to add pension data to other data sources to complete a holistic view is the most essential next step and a prerequisite to the consumer being able to get comprehensive advice and improve their overall financial wellness.

Conclusion and Continued Collaboration

Moneyhub remains steadfast in our commitment to facilitating a smoother, consumer-friendly pensions dashboards ecosystem. We eagerly anticipate further collaboration with the FCA and other stakeholders within the Dashboard Operators Coalition (DOC) to ensure that UK consumers can benefit from a well-regulated, efficient, and user-centric range of different pensions dashboards services.

As part of our ongoing dialogue with regulators and industry partners, we look forward to contributing to an evolving regulatory landscape that best serves the interests of all parties, especially the consumers.

If you’d like to see a copy of our response in full, you can request one by sending us an email →

Qualifying Pensions Dashboard Services (QPDS) enabling legislation comes into force

Government Pensions Dashboards rules forging ahead

His Majesty Treasury’s (HMT) qualifying pensions dashboard services (QPDS) enabling legislation comes into force

While there is still a little way to go before consumers are able to start using commercial dashboards to their full capability, this devlopment is an important step on the legislative journey to dashboards. It enables leading firms to start crystallising their plans. Developing a QPDS is a hefty undertaking, requiring around 3 years to develop, so those providers who have yet to start their journey towards delivering a QPDS need to start now. 

We know from research that consumers want to be able to see all their pensions and wider financial universe all in one place, and that this is how businesses can achieve better outcomes for their customers. What’s more this is becoming an increasing priority for the government. Indeed, recently the Pensions Minister Paul Maynard emphasized his commitment to dashboards at the Pensions and Lifetime Savings Association’s annual investment conference, encouraging firms to ‘get their data ready now’.

Market-leading firms, like Standard Life have already committed and started working towards the delivery of a commercial pensions dashboard.; Today’s development gives them and others greater legislative certainty meaning they can push forward with their QPDS implementation plans, getting ready to submit their QPDS applications to the FCA as soon as the FCA opens its QPDS Authorisations Gateway.

Below is a summary of where we are in the pensions dashboard journey, and what we can expect next. 

Commercial pensions dashboards are such a complex undertaking that they require four sets of rules to regulate them, from four different Government bodies:

• Department for Work and Pensions (DWP) Regulations in December 2022 created the legislative framework for dashboards (this created the legislative requirements for commercial dashboards which are referred to as a Qualifying Pensions Dashboard Service, or QPDS) - relevant link: https://www.legislation.gov.uk/uksi/2022/1220/part/2/made

• Now, 15 months on, HMT has amended its existing financial services secondary legislation by adding “Operating a QPDS” to the long list of regulated activities which are overseen by the Financial Conduct Authority (FCA).  This HMT Statutory Instrument amendment comes into force today: 11 March 2024 - relevant link: https://www.legislation.gov.uk/uksi/2024/169/made

So that’s two done, with two to go: but what are they, and when are they coming? The final two pieces of the dashboards legislative jigsaw are:

• The Money & Pensions Service (MaPS), through its Pensions Dashboards Programme (PDP), is going to publish a suite of Standards with which all QPDSs must comply.  And all QPDSs must be audited by an independent expert every year to ensure they do, in fact, continually comply with all of the MaPS PDP Standards.

• The MaPS PDP Standards for QPDSs include Design Standards which will ensure all QPDSs offer consumers the same, or a very similar, user experience.  There are also numerous other PDP Standards which control how QPDSs must operate in conjunction with the Government’s Central Digital Architecture (CDA) ecosystem for dashboards and data providers.

• The fourth and final legislative element for QPDSs are the detailed FCA Authorisation and Conduct of Business (COB) Rules.  These will cover what nascent QPDS providers must do in order to be authorised with PDS permissions by the FCA.  The QPDS COB Rules will cover what providers are allowed to do with their QPDSs, for example, Rules on what providers are allowed to do with the data about customers’ different pensions after they have found their pensions by using a dashboard.

• Shortly after that, the FCA will open its Authorisations Gateway to start accepting applications from firms to become FCA-authorised as QPDS operators.

• Once FCA-authorised, a QPDS can be connected by MaPS PDP to their CDA, to enable extensive end-to-end system testing to commence.

We're already working with leading providers to develop their dashboard offering, and deliver pensions clarity to consumers.

Very recently, the pensions minister Paul Maynard reiterated the Government’s dedication to dashboards, stating: 

“It is more important than ever that people understand their pension information to prepare for financial security in later life.

That is where dashboards come in. They are critical in my view and have the potential to change how savers plan for their retirement by allowing customers to view their information including the state pension, all in one place, online."

While it might seem worth waiting until final rules are announced, developing and launching a QPDS is an incredibly lengthy project, and it’s imperative that firms start right away if they’re looking to offer a dashboard to their members.

It is too big a risk to wait. Leading brands like Standard Life have recognised the impact great pension dashboards can have on their customers today and also the clear direction of travel the FCA is driving around better outcomes for the consumer.

How to connect your Pensions Dashboard to the Central Digital Architecture & Pension Providers

Connecting your pensions dashboard to the government’s central digital architecture (CDA) can be a daunting task, especially if your team is not well-versed in the technical aspects of the process. This post aims to provide an overview of the challenges and complexities involved in the connection process and how partnering with the right company can make this much easier.

Watch the webinar: How to build a pensions dashboard →

The Pensions Dashboard Ecosystem

Integrating your pensions dashboard with the CDA involves a lot of work. Unlike open banking, where customers authenticate with each bank or credit card provider individually, the pensions dashboard ecosystem allows customers to authenticate and verify their identity in one place via the Consent and Authorisation Service. This approach simplifies the process to some extent but doesn't remove all the complexities.

Connecting to the Central Architecture

You’ve gained all of your relevant permissions , and you’ve developed a User Interface that complies with all the relevant design standards . Now it’s time to connect to the PDP Central Digital Architecture (CDA) which is required for the ‘find’ process in Pensions Dashboards.

To do this, you'll need to use the User Managed Access (UMA) 2.0 standard.

This complicated protocol isn't widely used, so it’s unlikely that off-the-shelf libraries or vendor support will be readily available.

You'll likely require custom development and experienced engineering teams to tackle the intricate API flow and cryptographic signatures involved. Additionally, a lack of a robust sandbox or test environment makes debugging incredibly difficult.

Dealing with Individual Pension Providers

Connecting to the central service for authentication is only one part of the process. You'll also need to connect to individual pension providers to access the relevant pension data, required for the ‘view’ process in a pensions dashboard. 

The minutiae of this is similar to open banking and can be labour-intensive, as you'll need to obtain data from multiple providers.

Maintaining Compliance and Security:

When connecting to the central digital architecture, it's crucial to follow various standards, policies, and reporting requirements as part of the code of connection. Additionally, you'll need to have the right security policies in place, conduct penetration tests, and ensure that you're capable of handling sensitive personal and pension data securely.

The Benefits of Partnering with a Technical Services Provider

Working with a company like Moneyhub, which has extensive experience and expertise in this area, can save you time, effort, and money. Moneyhub can handle the complex UMA-based API and connections to pension providers while offering a simpler, single API for user authentication and pension data retrieval. 

You then have the option of designing your own front-end user interface, or we can handle that for you too.