The UK is developing a new pensions ecosystem called ‘Pensions Dashboards ’. This online government-regulated dashboard will help people access their pension information in one secure 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 could improve people’s engagement with their pensions.
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 event programme, Thinking Forward .
Below are Anders’ answers to many of the questions he received on this topic.
If you could start again, what would you do differently?
We would have established and managed user expectations very differently when launching the dashboard. The user expectations were higher than the initial delivery, which meant that it took us longer to achieve the level of user confidence and trust that we wanted. Another key lesson was to not use dummy data for user-testing.
Could you expand on differences in gender engagement?
Initially, the dashboard was primarily used by high-income individuals with greater knowledge about pensions. But over time we have tried to increase engagement among other groups, including the lower paid, women and those with relatively low levels of pension knowledge.
With respect to specific gender difference, we have found that female users use the dashboard for longer, but less often. We also found that male users made more conclusions – some of which were right, some wrong – whereas more women said “I’m not sure”, often even when they knew the right answer.
How has the dashboard introduced competition into the Swedish Pensions market?
The dashboard has provided greater transparency, which leads to pension savers being better informed and therefore making more informed decisions. It is now widely used by the great majority of pension advisers when discussing retirement planning with their clients. In fact, 95% of pension advisers use the dashboard. However, it has not directly increased competition.
It’s great to implement a dashboard to increase visibility of all pensions, but what do users do once they have this visibility? Is it actually influencing their decision-making?
People are becoming more engaged and making more active choices. There have been changes to Swedish pension and savings habits, particularly around retirement, some of which relate to how people are using the information provided via the dashboard.
For example, over the past 10 years there’s been a big change in retirement behaviour, with more people opting to work part-time beyond their standard retirement age. Previously people didn’t understand how they could do this.
Another change is more people opting for lifetime annuities at retirement.
The dashboard is also empowering consumers, making them more informed about their retirement and less anxious as a result. This has been demonstrated in consumer research in Sweden, which compared knowledge and attitudes to retirement among those using and not using this dashboard.
Have you considered allowing savings to be added to the dashboard to give users a holistic view of overall finances in retirement, not just pensions?
Currently this isn’t done automatically but users can manually add details of other savings. This functionality is also on the future development roadmap.
Can property value be added to dashboard? Is this from an equity release perspective?
This is not currently done automatically but users can add in details of other savings and wealth.
In Sweden is any functionality provided for other people to be given access to the dashboard? For example, children helping their parents, especially at the point when they become less capable of making decisions?
This isn’t currently provided, but there is functionality to appoint a power of attorney on the dashboard for the state pension provider’s customer support.
What tools were used to drive awareness of the dashboard among the wider population? For instance, how significant was the advertising budget? And was this government-funded budget or from member organisations?
All advertising is done by the pension providers – state and private.
In the beginning, the Swedish dashboard did not have much PR or media promotion as it lacked the resources to drive this. Later on, different distribution channels via providers were used to help promote the dashboard’s benefits.
What data do employers get so that they can understand how engaged their employees are and how many are using the dashboard?
Holistic data and insights are shared with the pension providers but not the end employers. However, pension providers can then share the data with employers as appropriate.
How easy or otherwise was it to get secure sign-on linkages set up and how confident are you from a data security perspective?
It was quite complicated working with lots of pension providers and negotiating standards for data security and information standards to the required secure sign-on linkages. Security is an ongoing operation. We have a schedule with scanning for security threats and penetration tests.
Has Sweden experienced any data breaches/loss of data/cyber security incidents?
We have not suffered any known data breaches. However, we have experienced issues around missing data from pension providers and sometimes duplicate data.
How important is it to provide financial education on what the information in the dashboard means for an individual? Who do you think has responsibility for this education?
This is extremely important and the responsibility is shared – there is a need for cooperation between state and private pension providers and the sponsoring employers.
ESG is a case in point. We are undertaking a study in order to include more ESG information on the dashboard. Conceptions of ESG are changing and vary between different countries, but we are working hard to ensure our ESG information will be relevant and up-to-date. At the same time, based on user testing we know that most users will only spend up to three minutes assimilating information on ESG, so this information must be effectively delivered.
Was the state pension data accurate enough at the start, given that everyone gets that?
It was up-to-date and 99.9% accurate.
How does the Swedish dashboard display policy information when the policy is manually administered?
The information is indicated as manual entry and presented in a separate table.
What role has behavioural science played in the development of the dashboard?
Since 2014 behavioural science has played a large role, and we have done a lot of research with psychologists and researchers. We conduct a lot of ongoing real-life testing of the dashboard’s use to continuously improve its functionality.
For example, we know that generally older users prefer assimilating information on the dashboard via text, while younger people often engage more with graphs and other visual representations.
More generally, we have put in a lot of effort into improving our user interface, to offer multi-channel options, and to make the dashboard simpler and more intuitive to use, with different layers of information – all of which have resulted in far better engagement.
Does the Swedish dashboard offer any transactional capability (for example, to consolidate pensions or change address), and, if so, to what extent has that increased engagement with users?
This is not currently offered.
What are the timescales for when a UK dashboard will be available?
According to the Department for Work and Pensions’ (DWP’s) consultation, the move to the digital architecture will happen in a phased process over a four-year period.
First, large schemes will be required to connect to the platform between April 2023 and September 2024. This will be followed by medium schemes between October 2024 and October 2025. Then small and micro schemes will be required to connect from 2026, although they will not be covered by the regulations.
The DWP said that state pension information will be available from day-one. This also applies to master trusts, personal and stakeholder pensions, money purchase schemes used for auto-enrolment, and public service pension schemes.
Outside of the pension industry there has been little publication of the intention to create pension dashboards. Surely this communication/PR needs to start now to support engagement?
I agree. This will be a vital task when launching dashboards in the UK – which can be viewed as an opportunity or a risk, depending on how it is tackled.
Setting customer expectations regarding the dashboard on day-one is vital to customer trust, engagement and the overall success of the dashboard.
In Sweden, there was a mismatch between our day-one delivery and users’ expectations. This was a huge problem. For the use and popularity of dashboards to increase you need to have advocates, but for this to happen expectations have to be set correctly and there needs to be trust.
The opinions expressed in this document do not necessarily reflect the views of Standard Life.