Pensions dashboards: how much difference will they really make?

Louise Doherty: Hello and welcome to the latest episode of Thinking Forward. With myself, Louise Doherty and Mike Ambery, where we explore the trends and developments affecting the UK pension industry. In this episode, we'll be discussing the pension dashboard. When is it going to finally arrive? How will it look? How will we use it, and what difference will it ultimately make to UK savers?

For this discussion, I am delighted to be joined by Sam Seaton, CEO of Money Hub Enterprise. I am also delighted that Matt Burrell's chosen to come back and join us. Matt is our Senior Public Affairs Manager at Phoenix Group. So, Sam, I'll start with you – a really warm welcome. Thank you for joining us. Can you tell the listeners just a bit about yourself and what you do in the industry? 

Sam Seaton: Yeah. So I kind of say I grew up in Towers Perrin, which is where I fell in love with pensions and all the intricacies that they have. And so I guess what's taken me on my journey to Money Hub, though, is getting much closer to the consumer. So I'd say that today I really have my consumer hat on, which obviously is what's taken me into, you know, the pensions dashboards advisory group and all the other different initiatives where I feel I can add a bit of value for the consumer voice. And so that's, that's my championing, I think. 

Louise Doherty: Fantastic. And you said you're on the pensions dashboards advisory group, Matt, you're also on the group.  

Matt Burrell: I am indeed.  

Louise Doherty: Do you want to tell us a bit about yourself, what you do at Phoenix, and again, what you do on the advisory board?  

Matt Burrell: Yeah, sure. So what do I do at Phoenix Group? It’s a very good question. Some people say not very much. But really what we do is we lead Phoenix's interactions with civil servants, with politicians, and to a certain extent with regulators and make sure that we can bring the experiences that we get from actually  being at the coalface, interacting with customers and making sure that those experiences find our way to government, to regulators and make sure that we can sort of help them shape the environment. So it's as good as possible for sort of the average person saving, the average person looking to access their pensions. 

And on the pensions dashboards advisory group. Again, our role really is to challenge government and to make sure that when they are implementing this, which is really is the biggest IT project that the government's done for some time, and they're not always renowned for being able to drive these things through, is to make sure that we're bringing the voice of industry, the voice of the consumer from Sam and various other different stakeholders to make sure that they do actually build something that works for people and provides for the needs that consumers have. 

Louise Doherty: I suppose then, let's set the scene a bit for pension dashboards. I feel like we've been waiting a long time for it, and we've spoken to a lot of people about it over the last decade. Fill us in. So why is it taking so long? Where are we at? What should we expect? Give us a bit of a picture. 

Matt Burrell: So I think you need to, you need to cast your mind back, to a time when George Osborne wasn't just a podcaster. He was, in fact, you know, inheriting one of the great offices of state. There was a conservative MP in Brighton. You know, the whole world seemed slightly different. It was before a certain referendum and, that sort of thing. So that's where we come to from this, this dashboards really came out of the Financial Advice Market Review. And it was one of the key recommendations to allow people to engage with their data a bit better. After the prototype project, which is when I started working on this, in October 2016, when I was, 26, so younger, thinner, more hopeful about the world.

Then one of the decisions that was come to is that this has to be a government project to a certain extent, because you're going to need compulsion to make sure that schemes share all of that data. And that unfortunately means you need legislation. Legislation is quite difficult to come by. There was this Brexit thing that happened in the middle that took up quite a lot of parliamentary time. So it's not all the fault of, you know, it's quite hard to apportion, where all these delays come from. I think part of it is that our national focus has maybe drawn away from, from doing things like this, which is creating key bits of national infrastructure. But, I like to think we're a bit more on track now.   

Louise Doherty: And Sam, from your point of view, how does it feel to you? I guess we were chatting earlier. Why are we doing this? Why is it so important to you? 

Sam Seaton: Well, just going back to Matt's point. I mean, I think the really big miss we had was this pension dashboard should have come in with auto-enrolment. So you shouldn't have really been able to take people's money, you know, out of their salary. If you like, you know, by law and put it into a pension without having a pension dashboard or dashboards, if you like, so that they can visit them and see where the money's going. So I feel quite strongly about that. So we are very late to the party. And why does it matter? Well, it matters because it's not just for industry, you know, it matters for government and the consumer ultimately, because I was looking at some data the other day and there are 11 million pensioners and just under 3 million of those are living on £11,000 a year. They're living on the state benefit. And we know from the work that the PLSA has done, that £14,400 is the minimum you can kind of exist on to have a lifestyle in retirement.

And actually really you need £31,000 to have a moderate lifestyle. And looking at what you can do with the £14,400, just to put it in context for people, you know, you were allowed to spend £100 a year maintaining your property. And, you know, we were talking about that, weren't we? About how does that happen? I mean, you know, what costs £100 these days in totality, when anything goes wrong with your place? And so I think that puts it in perspective how important it is. If we want people in a DC world and a master trust world, where they're responsible for their pensions, if we want them to have a good retirement lifestyle and are not, you know, living on the state benefit, we need to do everything we can, which includes pension dashboards, pulling it all together for them. I mean, ultimately, this is sort of what we're doing is making available online the information that we send to people in the post. It shouldn't be as revolutionary as it is. 

Matt Burrell: I mean, the key thing, I guess, is the find. Right? If you have a variety of employers and you move house a lot, like I think I did when I was younger, it's very easy to lose track of these things. So you've got, I don't know, I can't remember what the exact figure is now. Around £40 billion sat out there in pots that people have 100% lost touch with. And if you're going to improve retirement outcomes, people need to be able to find those. But really the data is not you know, it's not that there's not that much of it, really. This is about sort of key information around, around fund value, around where your pension is held. And if you look at other elements of financial services, being able to make your data available via an API is just the cost of doing business. It's not something revolutionary. It's something that is sort of the very basics of serving your customers. And I think that's the way that we should be viewing it.  

Sam Seaton: Yeah. And I think we've also got to remember, I feel that we're a little bit out of whack sometimes because this is about viewing. We're not able to do anything we're going to get to view the pensions. Whereas if you think about how the banking sector has moved on in terms of opening account, which I don't know, with a video and a bit of this and a bit of that, you're away, but you can actually pay. People have money paid into that account. We're not doing anything like that in this pensions dashboards arena. We're actually just allowing people to be able to see their pensions. And it feels so radical to everyone. But I'm not sure why.  

Louise Doherty: And you're saying that we're actually quite late to the party. We'd had a conversation with Anders Lundström, from Sweden, and he was telling me the Swedish dashboard, and they're cited as being 10 years ahead of us. But I remember him saying that in the first two years of their build, they had to throw away 95% of their code. So actually, are there lessons for us there? Are we going to end up doing the same, and when do we think it's going to happen? 

Sam Seaton: Well, I mean, I'd like to hope that we won't throw away everything that we've done because otherwise Matt will be obviously having another heart attack. Matt will be ready to retire by then. 

Matt Burrell: Exactly.  

Sam Seaton: Because I'd like to think that, you know, one of the things that, we can do a little bit better these days is we have a more agile approach to development, which we've all learned a lot from. And that should mitigate having to put everything in the bin, because if you, if you, iterate and, and obviously take feedback and then, you know, go again, you know, that should protect you to a degree. But as Matt said, you know, does the government have a great track record of IT projects? And, you know, in the past we probably haven't seen that. But I am such an optimist, you know, that I live in hope. 

Matt Burrell: I think there's, I mean, on the late to the party point, I think, yes, we definitely are. Australia has an equivalent of this. Sweden does, Norway does. Belgium does. We're sort of behind the curve of G7 nations. Is how I’d describe ourselves in terms of providing these kinds of services. But the advantage of that is we're able to look at the way that other people have done things and learn lessons from it. So in particular, the Norwegian example, there’s a great guy called Trond who runs the Norwegian dashboard and their experience of how you get people to actually use this, because it's all very well building it and thinking build this and they will come.

But that's not necessarily true. So, they built a single central dashboard, which is not the plan here. The plan is for multiples, but we'll talk about that a bit more later. And what they found is that once they opened up the data feeds so that people could access their data in the place where they where they want to, you know, so it'll be the existing digital real estate that they have on their phones, their banking apps, the things that they already open on a day to day basis. 90% of the data that's accessed in Norway comes through those, rather than the central dashboard that was built. 

Louise Doherty: So it's plugged in to something that people are customers are already using and comfortable with? 

Matt Burrell: Exactly. In the long run, this is about data portability and allowing people to access data when they want to. 

Sam Seaton: I think there's another element to that, which is also people want to be able to do something with it. So what industry or what the other, you know, providers in Norway have, have over the government dashboard, if you like, is there's an onward journey. So once you've found all your pensions in this case, I might actually want to understand a bit more about what that means, because actually it might be a bit of a revelation to me that I've got more money than I thought, which is brilliant. And then obviously being able to see that with the state benefit and, and trying to understand what that means when I retire, you know, which could be a long time, could be a long time from when you're looking at these numbers or it could be very imminent, you know. So either way, I think what people want and that's what they get from industry. 

Mike Ambery: So I'll go in a different direction. We've spoken about it taking a long time to get to where we've got to. It's like pints of beer on a Thursday night, Matt.  

Matt Burrell: I know nothing about that.  

Mike Ambery: You start with one and then many come along at once. How many dashboards do we actually need?  

Matt Burrell: I'd say it's about horses for courses. Right. And, in one of my previous roles at the API, we commissioned some research on this where we actually, we asked different generations and different groups, people, where would you want to access this data? And what you found is actually, according to different demographics around age, you know, level of wealth, lots of things. People wanted it in different places because there are some people who would say, I only trust the government. I would only ever go to the government one, there are also other people who said, I do not trust the government and I don't want them snooping on my data and have that view of the world. And therefore, if you only had one more government, one you wouldn't be catering for them. And I mean, I think that's the beauty of it, is that by allowing people, allowing firms to sort of to create a variety of dashboards, they can target specific niches in society and give people the information and the support they need where they want it, rather than trying to view everyone in a one size fits all manner and channel them all into a single place. 

Mike Ambery: I’ll ask the same for you, Sam? Obviously variety and you’ve spoken before about utilisation of dashboards and you know, how can that information be taken, consumed and given appropriate advantage to, let's say, consumers of which you are champion? Again, do we do you really see the value in a multitude of products? And how does it differentiate that with choice? We've seen that in an at-retirement space with choice you just sort of make one decision and crack on with it and keep to it.  

Sam Seaton: Well, I just think, the societies where there is choice are the stronger societies. So we know that from democracy right through to, you know, you could argue what we're trying to do here with pensions dashboards. I have no idea how many you'll end up with. I have no idea. And I wouldn't want to predict it, but I think what we've got to remember is when we first started on our smartphones, I mean, how many apps did you need? Because I started with just a couple, you know, now I've got five pages of them. And I think it's the convenience of technology now in terms of what you want, when you want it and the accessibility of it. So, you know, I don't know about you, but I think I must have seven airline apps, you know, in my little folder of airline apps. So I guess what I'm trying to say is the way the UK system is set up where the pot doesn't follow the member.

Unfortunately, I think you're going to end up with a lot of pensions and you’re probably going to end up with a lot of pension apps, and you're going to end up with a lot of pension dashboards, because I think in each of the pension apps, you're going to want to be able to pull that data together, because whatever  your favourite provider is or your current provider, this is data that you're going to need probably to have accessible to be able to use the onward services. And that can include some things that are a bit more radical than what we've seen in the past, like being able to perhaps get on the mortgage ladder a bit earlier. So I can share my pension data with my bank, potentially to help me get on the mortgage ladder a bit earlier. These are all things we're going to see. They'll be quite different, you know, post pension dashboards. So that's why I'm a bit, I don't know how many there’s going to be. It's hard to predict.  

Mike Ambery: I agree. I'm going to go now back to some of the uses of the dashboard. I'll obviously mention bagpipes. Cricket, football, life sciences and fintech are all areas where the UK leads globally. Clearly, part of that is around open finance and open banking, of which, the ability of members to export data, I think is a key issue. So if you're a consumer, put yourself in that consumer hotspot, which you've probably done, Sam. In exporting that data into open finance applications, how do you think that could be beneficial? Now you've spoken about mortgage applications before, but what’s the art of the possible?

Sam Seaton: Well, the art of the possible is that you might actually end up engaging. I mean, honestly, the ultimate goal is get people to engage with their pensions earlier and I think we can do it. It's something that I understand from history. There's been a bit of nuclear fallout here in terms of pensions. So, you know, a bit of, you know, which I think we didn't have in Australia and some of the other countries you mentioned before, where, you know, if you go to those kind of…people are really proud of their pensions. I mean, there's something that they are really genuinely keen to see, to look at, keep an eye on.  

Louise Doherty: They talk about it in the pub. 

Sam Seaton: Yes, actually talk about it. I feel we are… So to me the Holy Grail is if we could get people, you know, to actually be chatting about it on a Thursday night when you have your first pint, then that for the UK, that's a massive achievement. So I think that is up for grabs. Like I genuinely think that's finally available for us.  

Mike Ambery: Completely agree. Matt, I'll come to you. And other than the questionable ability of what you do at Phoenix Group, which I will come back upon, as you do a heck of a lot and I see and value it. I guess my question is, what else needs to go hand in hand with what Sam has just spoken about there? And if I think maybe sort of guidance, review at the point of retirement, how do you interpret that data? What other policy legislation needs to happen at the same time as consumer having open access.  

Matt Burrell: So the way I see it, this is the other key sort of benefit. I mean, if we end up having a sort of, you know, the Australian culture of, you know, have a schooner and discuss you super, kind of thing. That would be great. But I think part of this is you've got to view this in tandem with a few other things. You've got to look at the Smart Data Bill, which is looking to apply some similar principles to savings, to utilities, to telcos. And what you're looking at for the first time is that people will be able to see, in one place, without having to have a million different spreadsheets. So something that's available to the average person, all of their financial information at the click of a button.

I mean, I always try to get one sort of esoteric reference in which is, you know, first of all, “Know thyself.” That's the route to enlightenment, right? Is actually knowing where you stand. And if we can manage to get all of these data feeds lined up and working in the right way, then there's some really interesting things you can start to do where you can start to show people the little economic inefficiencies in their lives, how they can fix them, and how they can use some of those savings to bolster their overall financial resilience. That's also dependent on some other bits around, the FCA and Treasury's current work on the advice/guidance boundary review. So I think there are some real opportunities here to create a model that actually is then exportable around the world, as we’ll be the first country that will actually have lined up all of these APIs in the right way.

Let's create a model that allows consumers to actually all be a savvy shopper, because, I mean, there are some markets around where basically if you're a savvy shopper, you get a good deal. But if you stay inert, you don't and if there's something that could prompt you like, hey, have you know, we noticed you've been with the same provider for X. I mean, I'm not going to go after any particular, any particular market. But, you know, have you considered changing, have you considered changing provider, you might save £30 a month. If you do that, maybe you can have £15, and you put £15 into your pension or your rainy day savings, something to make sure you've got that bit more financial resilience. And because we're not very good at teaching that stuff at school, but by being able to analyse people's data for them and present them with these good opportunities, with these happy paths that they can take that could genuinely change a lot of lives and prevent people from going into the debt spirals that we see, and creating the vulnerabilities that end up with people having pretty miserable lives. 

Sam Seaton: Yeah, especially when you think about how it becomes more immediate. So I am a big fan of education, but I'm not a big relier on it because I think, you know, you learn something when you're 12 or 16 or whatever it is and, you know, yes, you understand it at one level. But actually, when life gets busy and, you know, some of, you know, I always laugh at some of the CFOs around that are the best CFO for their companies, but actually at home, the worst for their finances because they just don't want to do any more finances, you know, and I just think actually, so you can't you can't mitigate that with education, can you? But what you can do with tech and with the ability to be just in time type data, even just for example, telling someone that you do realise that today's the day you get the best deal on your insurance. If you if you actually bother to ask someone.

Like it's six weeks out, this is when they all want you. The rundown now means, to be honest, two weeks out, they're all a bit like whatever. So did you know that? So imagine being able to tell someone that on the six week mark before, or two weeks before that saying get ready, you know, what is it Amazon Prime day’s coming. But no, it's your insurance. The optimum day to get insurance. You know, these are things that, you know, we don't know. You can educate all you like. But actually, to be honest, you need to put it in the in the fingertips of people's hands. And then they can actually take action.

Not everyone, but a lot more people than would have. So this is the bit that I think we can do. And then I think actually saving them some money here and there, then we should be able to perhaps get the savings culture back in, because we can sweep that with open banking payments Straight, at no cost, into a pension or a savings account. So we can get that savings culture going again, which I think has gone a bit AWOL. 

Mike Ambery: Yeah, I completely agree. So lots of positives coming out of all of the tech and evolution from the dashboard, effectively. I guess, I want to go to the flip side of that. The negatives, when someone has data and that's personalised and also some of the myths that we hear around some of the utilisation of data, we've got to a long place. Should we be optimistic or pessimistic about the utilisation of data and security? Also knowing in Australia, in the US, a lot of data and cyber security is higher and higher and higher up the agenda. And it's fast becoming the number one subject. So how optimistic are you about the utilisation of data? 

Sam Seaton: So I'm really optimistic because one of the great things about what we're doing, which we're not seeing, you know, in so many of the other countries is the explicit consumer consent. So let's not forget that everything we're doing, the pension, open banking, the smart data bill, it's all about putting the control back into the consumer's hands. And so my view is that it's a little bit you know what you can't see, you can't influence. So putting that back in the hands that I can see it is step number one. And just going back to the data thing, I mean, can I just mention Facebook, Google, Amazon. It's like dating apps. Yeah. I mean that ship sailed. What I call the negative ship has sailed. Everything we're doing now is like scraped, running after it with the positivity.

Trying to put that back in to the camp. Because, you know, I personally would like to pay for Google Maps, but personally I'd like to say £40 a month. I'm like, you know, I actually would think it would be great. I don't get the choice. But you know, I can't get around London or the UK without Google Maps. I just go around in circles so I just have to succumb to it. But yeah, I think if we, if we if you don't realise what Google Maps knows about you by just using Google Maps, forget all the other things, then then we're all quite naive, really, aren't we?  

Mike Ambery: Thank you. Yeah. And before Lou has the final question there and also reflects on the use of Google Maps and geography, which we won't talk about.  

Louise Doherty: Yeah. I’ve got no sense of direction. Thanks, Mike, for sharing that with everybody. 

Mike Ambery: No problem. 

Louise Doherty: Even with Google Maps, I guess. Matt, where do you stand on that? Optimistic or pessimistic?

Matt Burrell: I would still put myself in the optimist camp. So I think there are a few, a few different bits that I would draw out there. One is that compared to some other jurisdictions, we actually have very tight and strong data regulation in the form of, well, shorthand GDPR. Actually, the 2018 Data Protection Act, whichever one you want to particularly call it, and also specifically for dashboards and some of these and for open banking apps, you also have the highest standard of Consumer Duty applied to it. So the FCA has the right to look at the business practices and the business models that we are implementing.

And ask us, “Are you preventing foreseeable harm?” And I'm not sure that in some of these other places, with some of these other bad examples you've seen, you do have a regulator that has that explicit right to ask whether you are pursuing good outcomes. So I think what that does, it means we are able to push in the right direction, in the knowledge that we're doing it in a safe and secure environment. And I think there are still, even within those particular strictures, really, really interesting opportunities that can help people.  

Mike Ambery: Okay. Thank you.  

Louise Doherty: You didn’t ask me, but I'm an optimist. Okay. So in that optimistic frame of mind, dashboards are coming. It's going to be fantastic. But in the meantime, what do we need to do? What do we need policymakers to do? What do we need the industry to do to manage expectations for our customers? Because it's about our customers, so they know what's coming and what to expect?  

Matt Burrell: I suppose the message, the message for industry and this comes, you know, from Chris Curry, who, you know, chairs the pensions dashboards programme and the group that Sam and I are both lucky enough to sit on, is that the timeline is the timeline, right? Get your data ready. Be prepared to connect. You will need a very good reason if you are not meeting the guidance. And I think it's really important to say that because it's one of those things where you say, well, it's there, but are they ever actually going, are they actually going to do it?

And I think from a consumer perspective, I think what's really going to be key is that especially now that we know that the, the Money Helper dashboard is going to be moving before others is to make sure that actually we get the right consumers through the doors there, so that actually that role that they're kind of playing is that the beta version of pensions dashboard can be done to its full extent, and make sure that all the bugs worked out, and we can get a really good and intuitive kind of consumer design that helps people. 

Mike Ambery: Thank you. Sam?  

Sam Seaton: Well, I think you’re right, I think we need to get Money Helper up and running as quickly as possible. I probably would have liked to have seen, perhaps some of the industry betas that have been so, progressive, you know, they've got a few, I probably would have liked to have seen some of them being able to parallel run with, with Money Helper. Because Money Helper is unregulated. They're in a different mode, if you like. So, for example, just take the client base, so the consumer doesn't log in to the pensions website. At the moment, there is no log-in. You can go there for lots of advice and guidance and help. Lots of calculators are very helpful, but there is it's not somewhere you go and log in. There's no app. Whereas with pension providers there is an app you log in to see your pension. There is a lot already that you're doing with your pension providers.

So it's actually quite a different approach for consumers. So I personally would have would have liked to have seen, you know, if I'm really honest and not, you know, not putting on my, what is it, uber positive face, I would have said maybe having two or three industry betas alongside Money Helper, probably would have been the right way to go about it. But they don't always listen to me on that PDA group. What's going on, Matt? I mean, what happens? You know, I made these suggestions and they don't listen. 

Matt Burrell: It's outrageous that they don't just listen to what me and you say and immediately do it. But, unfortunately, this isn't, you know, this isn't the Matt and Sam dictatorship that it that it ought to be. This is democracy.  

Louise Doherty: I mean, if it was, we would have had a dashboard five years ago.  

Matt Burrell: I'm sure. And that would have been considered slow by my standards. 

Louise Doherty: Erm, on that note, I’d like to thank you both so much for joining us today, and I'm sure the listeners really enjoyed the conversation, and got a lot out of it. And as always, get in touch. If there are other topics you'd like us to cover. Thanks for joining us.