In September 2016 the UK government first announced its plans to deliver pension dashboards to consumers. Almost 10 years on and the first dashboard is still not available to consumers.
After years of delays and minimal progression, a new deadline has been set for all pension schemes to be connected by October 2026. This will hopefully mean a front-end dashboard will be available shortly after.
In normal circumstances a project with this many setbacks would have been abandoned a long time ago for another solution, however there are reasons to be optimistic that implementation will be successful on the fourth, and potentially final, try.
Successful implementation in other countries
The concept of a pension dashboard is not new. In fact, pension dashboards have been implemented successfully all over the world.
In Europe, there are eight countries that have a functioning pension dashboard, the oldest being Denmark, which first introduced their version in 1999.
The key thing to note is that none of these dashboards arrived with all the bells and whistles – it was an iterative process.
Evidence from other countries have seen years of data issues, with experts predicting it to be between eight to 10 years until the data from UK pension schemes will be truly settled. For it to be successful, the UK should consider what the minimal viable product it wants available to customers.
One thing is clear: dashboard functionality and data quality will improve with time, but this is a marathon, not a sprint.
Multi-dashboard system
The UK will be the first country to employee a multi-dashboard system.
Rather than a centralised government dashboard like in other countries, it will be available to pension providers to create their own white-label dashboard or use third-party software to integrate into their banking and investment apps.
The benefit for consumers is that it will be available to them as part of their regular wealth management experience rather than having to seek out the service via an alternative source.
There is hope that this will result in the younger generation interacting more with their pension. It is estimated that there is £26.6bn currently sat in lost pensions, so the need to provide this service is greatly needed.
The benefit of commercial dashboards is it will encourage innovation through competition and hopefully speed up the process compared to if a centralised government dashboard had been chosen.
Without development, firms are aware that they could lose consumers to competitors.
Consumer duty
With the introduction of the Financial Conduct Authority's consumer duty, we have seen a willingness for firms with both open and closed products to reassess their data strategy.
Not knowing the demographics of the client base, what characteristics could impact consumer outcomes, or how services are adding value to members is unacceptable.
The regulation has subsequently led firms to enhance their data infrastructure and improve the integrity of their data for monitoring and reporting purposes, plugging the gaps that would have previously been a blocker to implementing the pensions dashboard programme.
