It is difficult to separate the Pensions Dashboard Programme (PDP) from the current turbulent economic and political climate, but it is important to attempt to do so. The PDP is a Government project, so Government actions directly impact the programme. Tumultuous economic and political climates can leave the general public (including those in the Pensions world) less confident of positive outcomes. However, recent research by IPSOS has indicated that 57% of the public surveyed were either very or fairly likely to use Pensions Dashboards[i].

Current conversations around PDP are still focused on data and system readiness despite the first compulsory window for connection being only months away. But to consider the benefits and pitfalls of the dashboard in 20 years’ time, some assumptions are going to have to be considered.

The first assumption is that data will be of a good enough quality that the connections run smoothly, and the output data is usable by the general public. This is a somewhat bold assumption. Although a lot of data cleaning      is currently underway, it remains a major concern. Sackers notes that 40% of those recently polled consider the provision of accurate Defined Benefit (DB) value data as their primary concern[ii].

If the data is not accurate before connection to dashboards, but is used regardless, this could easily create some considerable concerns for members. Consider a situation in 20 years (or even later), with decades of personal retirement planning having been undertaken based on the output of the dashboards. If membership data is not accurate, then when members come to retire, their records will be reviewed by administrators and their benefits revised. This would impact peoples’ lives significantly. The same concerns are reflected in DB transfer values. If a user receives one value on the dashboard, but a notably different figure is provided in a formal transfer, retirement planning through pensions dashboards becomes redundant.

Data accuracy has always been of significant concern, but as people get unfiltered access it is going to be more crucial than ever that data is correct.

In considering DB value data, it could be argued that this will become a less relevant concern in 20 years. There have already been significant decreases in membership sizes, dropping from 14 million in 2006 to 9.7 million in 2021, as well as increases in closure to all benefit accruals[iii]. This implies that the trajectory of dashboards would be based more on Defined Contribution (DC) benefit data than on DB, reducing the risks noted above.

The next assumption is that the systems will be ready, secure, and future proofed. This seems a less bold assumption, with pension administrators doing vast amounts of preparation. An important factor when 50% of schemes polled by Sackers intend to use their existing third-party administrator’s connection method[iv]. Cyber security remains a significant concern however, with cyber-attacks increasing to 27% in 2022[v]. Cyber related crimes have increased substantially in the last 20 years, but it is in recent years that they have become even more sophisticated. It is apparent that over the next 20 years, data security will be essential to the safe running of pensions dashboards. As cybercrime becomes more intelligent so too must the security used against it.

Given these assumptions are met - that data is provided accurately in a secure and accessible manner - what would this mean for retirement planning? For Generation Z (those currently aged 18 – 23) who are already far more conscious of their retirement plans than their two predecessors (Millennials and Generation X), it would mean a great deal. A survey by PensionBee has highlighted that only 23% of Generation Z do not know how much they have saved for retirement[vi]. As this generation is already demonstrating a clear interest in their retirement provision, any development in the ability to provide holistic access to their savings is only going to be deemed as positive.

With a generation that checks their bank balance on a daily basis[vii], in 20 years’ time when they start to approach retirement it is reasonable to assume that they would take the same level of diligence with their pension savings – and pensions dashboards could provide this.

Chris Curry, Principal of the PDP, considers pensions dashboards as “supporting better planning for retirement and growing financial wellbeing.”[viii] It is clear that the PDP is seen by many as a desirable development in their financial journey and knowing the value of your pension savings does assist in planning, but this is only one step. The PDP and the Money & Pension Service would be remiss if they do not mitigate against poor financial decision making, otherwise there will not be any “growing financial wellbeing.” This will have to be an ongoing commitment that is considered carefully from inception throughout the next 20 years and beyond. If people are not fully informed, it is too easy for poor financial decisions to be made.

It could be argued that the pensions dashboard is a concept akin to a credit report dashboard, such as ClearScore. One in three young people (Generation Z) check their credit file, something that 20 years ago was far from commonplace, but now made easier thanks to technological advancements. ClearScore provides an accessible dashboard that reflects data collated by Equifax[ix], a credit reference agency. Equifax gathers and analyses a wide range of personal data that is then fed into the dashboard. Credit reference agencies and the Pensions Dashboard Ecosystem share a similarity in that they function as a place where data is collated and pushed to a dashboard. In less than 10 years ClearScore came into existence and is now used by 10 million people in the UK[x], demonstrating a clear appetite for dashboards. But ClearScore does more than just display data, it provides functionalities to access other related credit products, educational material on how to improve your score and avoid scams, as well as dispute data issues.

As the PDP develops over the next 20 years, there will be opportunities for companies like ClearScore to provide tools to access pension data in an engaging and constructive manner. To be able to give users a place to review the data that pension schemes hold, and perhaps even dispute errors. This functionality could go a long way to respond to the first assumption made earlier, that if data is not accurate, pension schemes may be able to work with their members to rectify it. Other tools could be developed that can allow users to educate themselves on the different options available to them and make more informed financial decisions. Wherever a pitfall may be identified, a solution could easily arise to resolve it.

Greater transparency of data and benefits will result in a range of improvements, helping people plan for their retirement and ensuring the correct level of benefits are paid.

The PDP has the potential to revolutionise retirement provision.