UK Pensions Dashboard Learns From Open Banking

The U.K. pensions dashboard program has been delayed by technical setbacks.

The nation’s Money and Pensions Service (MAPS) has fallen behind schedule with its pre-launch testing, according to a Tuesday (Dec. 3) report from The Times.

Although there has been no official announcement on the issue, the report raises questions over whether the system will be ready to launch in August 2023 as originally planned.

The Financial Conduct Authority (FCA) has already had to push back the deadline for implementation, giving pensions providers an additional two months to prepare after the initial June 30 deadline was extended.

Pensions Dashboard Regulations Explained

The Pensions Dashboard Regulations, which came into force in December, were designed to create the legal and technical framework for unified dashboards that enable retirees to view and manage their pensions from multiple providers.

In an arrangement that mirrors open banking, pensions providers are mandated to share data on the schemes they run and allow dashboard operators access to that information.

The need for the program comes from people struggling to stay on top of pensions generated from multiple jobs over their career, increasing the risk of losing out on money they are entitled to at retirement.

The Pensions Dashboards Programme (PDP), which is responsible for overseeing the system, is currently running a final consultation on design standards, which is expected to conclude in mid-February. Simultaneously, the FCA consultation on its regulatory framework for the dashboards is also underway.

Throughout 2023, pension schemes will be invited to connect to the system, which was built primarily by Capgemini Pension Trust and Origo Transfer Service.

As things stand, firms are expected to be ready to connect by Aug. 31, with an exception made for smaller providers with less than 5,000 pensions under management.

In addition to the free, non-commercial pensions dashboard that has been developed by MAPS, several private sector companies have also set about developing commercial pensions dashboards.

These include companies like insurance firm Aviva, AI-based open banking platform operator Bud and FinTech firm Moneyhub, which were all initial partners in the PDP’s pilot scheme and helped inform its technical standards.

The Next Phase of Open Finance

While Aviva’s entrenched position in the U.K.’s wider pensions ecosystem makes it an obvious candidate to operate a pensions dashboard, Bud and Moneyhub’s interest in the scheme follows a less obvious rationale.

However, their experience as open finance specialists that build and connect data sharing application programming interfaces (APIs) make them well placed to create dashboards. In fact, the entire pensions dashboard project can be considered as an extension of the logic of open banking.

After all, the basic premise of sharing data with approved firms in order to help consumers better manage their finances underpins both movements. The only difference is that where open banking was concerned with bank account data, this latest project pertains to pensions data.

And just like information aggregation platforms powered by open banking can seem more beneficial to people with more bank accounts, pensions dashboards are seen to be most useful to people who have worked many jobs and are due pensions from multiple organizations.

This was the finding of one PDP survey, which found that 57% of respondents would use dashboards if they were available now, with the likelihood rising to 80% among people with three or more private pensions.

The research also found that 81% of respondents had one or more private pensions in addition to their state pension, suggesting that the potential market for pensions dashboards is huge. In fact, 44% of respondents said they would be willing to pay 5 pounds ($5.98) per year for the service.

So, with most of the pension-age population of the U.K. holding multiple pensions, any provider that can add value to the basic proposition and create a product that people are willing to pay for is likely on to a winner.

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