The pensions dashboard should be an effective tool to tackle the savings gap – as long as it’s personalised10 March 2017
With a prototype of the pensions dashboard due in March 2017, thoughts are turning to what this could look like. The stated aim of the project is to create a workable dashboard that allows users to view all their pensions in one place. But with such a proliferation and variety of users, a one size fits all dashboard is not going to solve the problems it was set up to address. The industry is officiating over a crisis with people simply not saving enough for their retirement and this should be front of mind for those developing the customer access capability.
Personalisation will be key to an effective proposition. Different users will require different solutions. Some may have a number of different pension pots, built up over a number of years, so their needs will be relatively complex. Without a comprehensive breakdown of how each fund is performing, as well as how they are forecast to perform and a ‘big picture’ view of their overall pot, their collective savings will be hard to manage.
Others will have simpler needs – those who have remained at the same company for a number of years or who are just starting out will have less need of a blow by blow account of their savings to date. Either way though, users’ journeys for the dashboard should be segmented according to number of customer segments to ensure the experience is meaningful for them.
However, the world of retirement saving is evolving. It is becoming less about pensions per se and more about generalised saving, whether through ISAs, or other, less conventional, routes. For some individuals, property too can form an important part of their financial plans for retirement. These will all need to be incorporated into any dashboard worth its salt, as will the state pension.
In a similar vein, users are increasingly managing their finances ‘on the move’ via apps, to such an extent that November 2016 saw smartphone usage overtake PC usage for the first time . A dashboard must be optimised to allow users not just to view it, but fully interact with it via mobile devices.
But why not take the concept even further? Built correctly, the dashboard could be a powerful tool that enables savers to really take responsibility for their savings in a way that hasn’t been possible before. The dashboard could give users the opportunity to fully engage with the myriad of real-time data available. While a static breakdown of how much you have saved towards retirement is useful, an interactive dashboard could offer real insight, for example, into how well individual stocks are performing within a pension fund, and how they are forecast to do over set periods of time.
The data from the dashboard could also be used to reflect the users’ ethical and social preferences. With environmental, social and corporate governance (ESG) in pension funds coming under the microscope, users could be able to view at a glance just how ethical the funds are that they are investing in – and if necessary make changes so that their investments are more aligned with their personal beliefs. Equally, technologies like gamification can be employed to get users fully engaged with the dashboard.
Additions of this kind would of course be ambitious. The Swedish version of the pensions dashboard allows you to simulate the impact on an individual’s income of retirement of varying their retirement age and there are plans underfoot in the Netherlands to introduce similar functionality. However, overall, existing dashboards around the world tend to remain static representations of what is in an individual’s pension pot to date.
Employing these strategies would also help address the savings crisis currently blighting the industry. If we can create a dashboard that allows pension account holders to fully engage with both their savings and their financial futures, this could transform the health of savers and of the industry as a whole.