In case you missed the second session of Pensions Dashboards Week 2024, here’s everything you need to know from Tuesday’s The Space Race of Pensions Dashboards, a look at previous implementations of pensions dashboards in Europe and Australia and lessons we can learn.
The UK is not the first country to introduce pensions dashboards. Norway, the Netherlands, Belgium and Sweden already possess well-established systems, and Australia has adopted a ‘Pot for Life’ approach, designed to simplify and improve saver engagement.
As the UK prepares for pensions dashboards to go live, this session of Pensions Dashboard Week highlights how these countries’ experiences can provide lessons for our own implementation.
The expert speakers, Richard Smith (Founder, Dashboard Ideas; Volunteer Chair, The Pensions Dashboards Operators Coalition) and Michelle Lusty (Propositions Manager APAC, Bravura) also brainstormed features the UK should look to emulate as best practice, giving maximum support to savers as they experience different stages of their retirement journey. Below are some key insights from the discussion. You can watch the full video here.
Richard Smith (Dashboard Ideas, The Pensions Dashboards Operators Coalition)
Be ready to change
In his presentation, Richard highlighted how the experience of the Danish F&P (Forsikring & Pension) in running their dashboard demonstrates the importance of being adaptable. It’s better to launch a simple, functional dashboard and refine it iteratively based on customer responses, than to try and start with an end-state product.
“Start small, launch an early version, learn from that and iterate. Don’t try and launch perfection, it’s much better to launch a basic dashboard and listen to consumer feedback. What do they like? What enhancements do they want to see? And so on over time.”
Users have become segmented
Currently only a small minority of users are highly engaged with their pensions, and these have dominated feedback. As a result, we’ve neglected the vast majority of the users in the UK and now a large proportion of them are disengaged from their pensions.
“When you get feedback, you find out that not all consumers are the same. We’ve talked to everyone in the UK as though they’re an old white affluent male, and I think we need to be better. People are diverse and different – we’ve learnt the importance of thinking about different generations, their needs and wants.”
Dashboards can build trust
The current lack of engagement means that UK users currently don’t have much trust in their pensions. Dashboards offer a solution, and have delivered huge rises in engagement since they were introduced in Belgium and Norway.
“Trust is pretty much on the floor. The DWP commissioned research in January 2023 showing that the prevalent attitudes towards pensions in the UK are detachment, complacency and fear. The cost of doing dashboards is cheap compared to the trust in pensions that they generate”.
Michelle Lusty (Bravura)
Data-sharing enhances engagement
Australia suffers from a lack of financial advisors, so needed a different approach to offering advice at scale, and adopted a technological solution. Government-mandated implementation of electronic standards and infrastructure enabled improved data-sharing, feeding improvements in the quality of advice that prompted greater engagement from users.
“Superfunds have an important role to play in providing guidance. The government has been very strong in its messaging to superfunds – you now have an obligation to provide guidance and advice to your customers. Consumers in Australia can log on to this government service and see all of their Superfund accounts across the sector, and they can also initiate rollovers (known as transfers in the UK).”
Straightforward advice is more effective
Initially the advice offered tended to be complex, but feedback indicated that users found it overwhelming. In response they refined their advice to focus on specific key topics, in order to build understanding and confidence amongst members. This has been a particular problem with younger users, and historically engagement has tended to focus on people approaching retirement
“The feedback Superfunds get from members is that it’s too much, too overwhelming. And so they’ve actually started to scale back those offerings, bringing them back to single topics of guidance and advice that members can understand. We still do have a disengagement problem, because younger people do see it as a tax to some degree. You have to start somewhere, and you have to go forward with that imperfect start and make progress.”
In case you missed the second session of Pensions Dashboards Week, you can watch the recording on demand here.
More Insights
