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Consumers push for control of their pension data

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OPEN FINANCE

Research commissioned by the Association of British Insurers (ABI) and published this month, estimates that there are around 1.6 million pension pots worth £19.4 billion, sitting unclaimed, simply because of house moves. That’s roughly the equivalent of nearly £13,000 per pension pot.

The research also reveals that people typically move house around 8 times in their lives and that only 1 in 25 are likely to remember to notify their pensions provider of their new address. Add in the fact that people are averaging 11 different jobs in a lifetime and are trailing their pension schemes behind them as they move around - it’s a wonder really that anyone has a full picture of their pension pot and provision.

And if something isn’t done, according to an estimate published by the Department of Work and Pensions back in 2015, there could be as many as 50 million dormant and lost pension pots by 2050.

The good news, however, is that something can be done and is being done.

In much the same way that Open Banking has transformed the way an individual can now really 'own' and choose to share their transactional data, we will very soon see how Open Finance will enable us to track, 'own' and control our pensions data.

Earlier this year, our team here at Visible Capital contributed to the FCA’s consultation on how best to extend the data sharing principles of Open Banking to Open Finance, allowing individuals to choose to enable third party providers access to, not only their bank accounts, but also to their pensions, mortgages, savings and investments.

Using the secure/building on learnings from the, tried and tested technologies of Open Banking, the first of the products coming up the tracks is a solution to the challenge of tracking down a lifetime of company and state pensions, and ultimately displaying on a single computer screen, where all your pension investments sit and what they are worth.

The technology, for the moment, is called Pensions Dashboard, and while is still at proposal/consultation stage, encouragingly it has been driven by consumers hungry to be able to review all their pensions arrangements in one place, control their own data and be better placed to plan their retirements.

In essence, the Pensions Dashboard is a digital interface that enables people to see all their lifetime pensions savings in one place and have access to more information for decision making. An individual simply authorises a Pensions Dashboard provider to securely access the industry’s millions of pensions plans to find all those belonging to them and then store all these details in the same place.

Of course, for people nearing retirement, there is an urgency for clarity in terms of making sure they are connected and re-united with each and every one of their pensions assets and ensuring that they are financially well prepared for retirement. However for younger people, the Pensions Dashboard will be a tool, just like their Monzo or Starling account, where they keep track on their phones of where their hard earned cash is going.

Pensions Dashboards will soon be as much of our lives as Open Banking, but it’s not the whole of the Open Finance story. Pensions Dashboard will be part of an Open Finance environment where we can click open a screen and populate it with our bank account data, pensions, mortgages, stocks and shares, savings and investments.

There’s no doubt that wealth management is moving in a new and exciting direction, offering wealth creators more control and financial advisers more insights and decision making tools.

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We are authorised and regulated by the FCA as a Registered Account Information Service Provider (FRN: 834786) under the Payment Services Regulations 2017 (PSRs).
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