This week data standards have been published to create a “pensions dashboards” for UK citizens.
The new announcement will enable people to access their personal pensions data – including about their state pension – via a single digital interface. The tool is being developed by the Pensions Dashboards Programme (PDP).
The newly published 94-page guide sets out the information that all pension providers will be obliged to supply to ensure that data is consistent.
Move towards Open Finance
The UK’s push towards pension dashboards has parallels with the efforts to encourage Open Banking. Both approaches hope to improve people’s knowledge and engagement with their personal finances.
Chris Curry, principal of the PDP said: “Some of the people we expect to use pensions dashboards may be unaware of what relationships they have with [pension] providers, whereas with Open Banking it’s usually through the provider with whom they already have an established relationship that they then access open banking,” he said.
The theory is there is an opportunity to bring together Open Banking and pensions dashboards to get to “Open Finance”, added Curry. “But in the first instance, the really important use-case of pensions dashboards is just to re-unite individuals with pensions and money that they may not realise they have,” he said.
One of the major challenges is that the UK’s pensions market is more “fragmented” compared with other countries that already have pensions dashboards, including Denmark, Belgium and Israel, according to Curry.
“The UK has pension schemes dating back to the 1960s and 1970s still in existence and a large number of pension providers – there are something like 40,000 schemes that we need to get hooked up to the pensions dashboard. In other countries it’s in the 100s, so we have a very different type of challenge,” he said.