On the surface, the idea is a fantastic one. In order to make it as easy as possible (or at least easier) for the average UK saver to understand theirsavings, a new ‘dashboard’ system has been proposed in the Financial Advice Market Review.
In the document’s own words:
“There are currently a number of projects looking at the idea of a ‘dashboard’. A pensions dashboard is a consumer-friendly digital interface that would display information about all of an individual’s pension savings in one place.”
“This data would ideally be retrieved directly from providers and would not require lengthy data input by the individual. The dashboard could update in real time and contain projections of pension income based on different scenarios. These projects involve a wide range of industry and Government bodies.”
An ambitious and undeniably appealing proposal – the only problem being that actually making it happen could prove challenging to say the least. There would undoubtedly be a fair few obstacles to overcome along the way – the following examples included:
1 – Collective Efforts
First of all, in order for the idea to gain any traction whatsoever, it would be necessary for largely every single entity working in the pension industry to come together and collaborate. We know that pension industry players can work together, but the question as to which will be willing to invest the necessary time and money in this particular venture remains unanswered.
2 – Data Gathering
And then of course comes the challenge of collecting all the data together to fuel the proposed system. How easy it is to access data and the quality of available data varies massively from one arm of the industry to the next. From data protection to the obvious challenges of real-time data delivery, it’s not going to be an easy job to pull off.
3 – Government Data
An open access dashboard system would be ideal when it comes to ensuring that savers are made fully aware of any changes to the current pensions system being planned or rolled out by the government. But again, incorporating the government in the system as a whole could prove hugely challenging – there are just so many complications to factor in. Like the private system, the state system would not be easy to incorporate.
4 – Accuracy of Projections
In order for a dashboard to work, it needs to be able to help savers make accurate projections long-term. As it stands, the software and general techniques used by pension service providers come up with forecasts that are all over the place – often highly conflicting. As such, coming up with a universal system the industry as a whole agrees on is something that for the time being seems almost impossible.
5 – Engagement
Last but not least, there would inevitably be the challenge of actually getting the pension-saving community of the UK to take an active interest in and engage with the new dashboard system, in order for it to be of any use. This would require a huge marketing push, provision of required training resources and help where required from experts. Again, an expensive and time-consuming process that might be a hard-sell for some pension industry players.