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Time to get ahead of Pensions Dashboard launch

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It seems that lockdown has generated waves of home-based activity trends - gardening, painting, clearing out cupboards and baking bread. Now, having spruced up our homes satisfactorily, we are turning to digital clearouts. The Week publication reflected the new national obsession in its recent review of the best digital de-cluttering articles, with suggestions such as sorting through downloads folders and trawling through email accounts to unsubscribe to circulars. However, there was also a focus on wrestling back control of personal data such as finding out all the ways Google has been monitoring us on myactivity.google.com and checking out third party sites that are using our Facebook or Google ID as login information.

Our data, intangible as it may be, is increasingly being recognised as not only personally valuable but accessible and manageable. Something that belongs to us, which we must control and, every so often, tidy up.

There’s no doubt that we are more cautious in our engagement with social media platforms as we increasingly value our personal data. A recent IBM study found that 81% of consumers say they have become more concerned about how their data is used online.

And the enthusiastic uptake by UK consumers of open banking clearly demonstrates we want to be more in control of our transactional data and use it to make decisions and take actions that will benefit our bank balances.

As I mentioned in a previous blog, one of the effects of this growing demand for control of our own data is to push forward pension reform and the soon-to-be-launched Pensions Dashboard, a digital interface that will enable people to see all their lifetime pensions savings in one place and have access to more information for decision making.

Not only will Pensions Dashboards be able to re-unite individual savers with their rightful share of the £19.4 bn of unclaimed pension pots, but it will also give people the opportunity to really own their financial data and take control of assessing their pension provision arrangements. With multiple jobs and even careers on our CVs, we pick up small pots of pensions as we join and leave workplaces. And then they just sit there. Most of us don’t think about moving them somewhere else or consolidating them, reducing the overall cost of policy and investment charges and increasing the ultimate growth potential of the sums invested.

Graham Vidler, director of external affairs at the Pensions and Lifetime Savings Association, quoted in Money Observer, commented on the fact that the majority of pensions savers do not take an active interest in where their money is invested, saying: 'Over 90 per cent of people auto-enrolled into a pension stay in the default fund.'

Default funds are selected in order to be as right as possible for as many people as possible, but by staying there for life, savers are missing out on opportunities to tailor their investments as they get older and priorities change. Near retirement, for instance, they might want to move their funds from significant exposure to equities to something less risky such as bonds. And then there’s the question of ethical preferences - by having easy access to comprehensive pensions data, individuals can, if they want, make decisions on moving to ethical funds or funds that support emerging markets.

This is all exciting stuff. There’s no doubt that Pensions Dashboard will give people greater control over their pension data and enable them to work with pensions advisers to fine-tune their investments to achieve better results. But I also think it will give the entire pensions industry an image makeover. Pensions, you heard it here first, are going to become really interesting!

The launch of Pensions Dashboard is just around the corner. If you’re one of those people stuck into lockdown digital clear out just now - maybe a little streamlining of digital and hard copy pension information will give you a head start on populating your personal Pensions Dashboard when the initiative rolls out.

by Christian Burgin CPO, Visible Capital

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