Making sure Pensions Dashboard does what it’s supposed to

22 January 2020

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From first inception of the idea, the point of Pensions Dashboard has been to help engage people with their pensions.

That’s because we know not enough people are engaged with pensions and this is a problem if we expect them to save enough for retirement, make the right decisions about how they invest or ultimately use their pensions savings.

But there is a risk.  With the opportunities that the functionality of the dashboard could bring, its main purpose may be forgotten.

Our research

We recently carried out some research to look at the level of engagement customers have with their pensions. We found there are broadly two categories customers fit into – the disengaged majority and the engaged minority.

The engaged minority are typically older, more financially literate and take an active interest in pensions decisions.  They’re also more likely to seek advice.

The disengaged majority cover a large range of consumers. But overall they tend to be younger, less financially confident and feel separated from making decisions about their pension.

Interestingly, the disengaged group is actually getting bigger with auto enrolment.  That’s because despite the fact auto enrolment is achieving its main aim of getting more people saving for retirement - pension savers haven’t made an active choice to join the scheme. This lack of making a conscious decision means engagement levels are low.

This group is also at risk of assuming that being part of an auto enrolment scheme on its own means they don’t have to take an interest in their pensions. 

Not losing sight of the goal

While one of the main objectives of the dashboard is engaging more people with their pension, it seems there’s a danger that it may miss the mark – it could just increase the engagement of customers who are already take an active interest in their pension.

An example of this might be a firm using the Pensions Dashboard to target high net worth customers and try to persuade them to move, possibly to a non-advised platform.  We’re already seeing some firms advocate adding a lot more data to dashboards to help in this sort of pitch.

This might not be a bad thing for some consumers but it misses the point. What the dashboard must achieve is people moving from the disengaged to the engaged camp. How this can be done isn’t yet clear.

But one thing we do know is that, if it’s used in the right way, it could become a very powerful engagement tool for providers and customers. Not to mention the benefit for advisers - as a more engaged consumer is more likely to seek, and see the value in advice.

About the author

Ian Macintyre

Strategic Insight Manager

Ian has worked at Royal London for more than 20 years. His area of expertise is ensuring IT services make life easier for Royal London Pensions customers and advisers. He has been working on the Pensions Dashboard project, on behalf of Royal London and its customers, since 2016.

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.