To help people plan for their retirement, the UK is developing a new pensions ecosystem called ‘Pensions Dashboards ’.
The online government-regulated dashboard will help people access their pension information in one secure centralised place, showing pensions from all periods of employment, including their state pension.
By providing people with a consolidated view of all their pensions, the government dashboard has the potential to improve people’s engagement with their pensions.
In addition, the dashboard may help people to make better informed decisions and plans for their retirement – potentially leading to improved financial wellbeing now and in later life.
Swedish case study
In order for this initiative to work well, pensions providers and technical services need to work together to achieve what is a relatively new concept for the UK.
To understand more about the challenges that may lie ahead for dashboards in the UK, we spoke to a world expert on the subject, Anders Lundström, vd (CEO) of minPension in Sweden, the Swedish pension dashboard. This formed the latest phase of our thought leadership programme, Thinking Forward .
Sweden is a global leader in dashboards, having launched minPension in 2004.
minPension is available free to anyone who has saved into a pension in Sweden. It plays a key role in enhancing engagement and driving positive actions. Last year there were just over 4.3 million users registered on minPension, which corresponds to two-out-of-three people aged 16–80.
Below is a summary of our discussion and key lessons for dashboards in the UK:
- Dashboards in the UK could be a powerful enabler that helps people to gain a more holistic view of their pensions. But inclusivity will be vital. This will include making provisions for pension savers who are not able or comfortable accessing their pension information online.
- Expect the UK dashboard to be iterative – 95% of the Swedish dashboard was rebuilt within two years, with much of the source code thrown away. We should work on the basis that this will be a test-and-learn project, and it’s hard to predict exactly how the service will be used and what people will want until it goes live.
- Understanding how different groups can be encouraged to use the service is essential to achieve mass adoption. The functionality that a young, disengaged individual will want is different from the needs of an older, engaged saver.
- Contextualising the data is essential. On the Swedish dashboard many people misinterpreted data and context was required to improve people’s understanding of their savings.
- Work will have to be done to ensure the UK dashboards are jargon-free, with agreed standards around the terminology and language used.
- In Sweden, originally some groups – such as younger people and women – were less engaged in the dashboard. A vital step to boosting engagement among these groups was to provide tailored pension-related content within the dashboard, rather than changing how the data was presented.
- It was found that women used the Swedish dashboard for longer than men, but less often. Women were also found to generally make more considered conclusions than men – or to avoid making conclusions altogether, where possible.
- The Swedish dashboard changed how many people retire. Modelling tools show Swedes the consequences of retiring early to their long-term savings – leading to more people having phased retirement and reducing to 75% of working hours and so on, but staying in the workforce longer.
- Robust controls and oversight with respect to people’s data will be hugely important to creating and maintaining trust among customers.
- It took at least two-to-five years for the pension providers to consistently provide the right info (the pay-as-you-go system took longer time). But as soon as the dashboard became well known and widely used, providing high-quality data became a priority for pension providers.
- In the UK, good information standards will need to be established from the beginning.
- Developing dashboards in the UK may well be more challenging than in Sweden because of the greater number of pension providers, different types of schemes, challenges of valuing guarantees and so on. (In Sweden there are just 35 pension providers and four major occupational pension schemes.)
- Dashboard enhancements will come over time as the industry understands the information, tools and user experience that people find most useful. In the UK we should work on the basis that it will take time before people have a truly comprehensive view of the value of their savings.
- Initial users of the Swedish dashboard were disappointed by its functionality. In Sweden it took around eight years to get really good data. For dashboards to succeed in the UK, customer expectations must therefore be carefully managed from day-one. This will be critical to gaining the trust and engagement of as many different pension savers as possible.
There’s a long way to go before the UK government-regulated dashboard is delivered. But to optimise the value that dashboards could ultimately provide to UK pension savers, it’s vital that the pension industry learns from other countries further along this journey.