- The FCA’s further consultation on the regulatory framework for pensions dashboard service firms closed yesterday (FCA – Further consultation on the regulatory framework for pensions dashboard service firms (fca.org.uk))
- Firms that want to offer commercial dashboards are being asked by the FCA about the choices presented to dashboard users and the exit communications when they leave the dashboard ecosystem
- Offering a commercial dashboard will be a permitted activity, meaning firms will need to be regulated by the FCA to host these
- In March the DWP published guidance on connection dates for all pension schemes, with SIPPs run by large FCA-regulated firms required to connect by 30 April 2025 – the same time as the largest master trusts
- Although schemes are not compelled by law to connect by these guidance times, they must connect by 31 October 2026 at the latest
Rachel Vahey, head of public policy at AJ Bell, comments:
“Pensions dashboards will have the power to help people make sense of their pension wealth. It will give them a complete view of all their pension pots, where they are and how much income they will provide in retirement.
“But having the information is only half the story. Pension savers need to know what they can do with that information – what questions to ask next, what information is missing, what options they have, and, importantly, how they can next act. That way they can make better decisions that could enhance their financial position in later life.
“The FCA has the job of designing how people will interact with the pensions dashboard, and crucially, what happens after that interaction. They need to get this right.
“Stopping the scammers is obviously important. But in a world underpinned by Consumer Duty, information should be able to be passed to FCA-regulated firms in the knowledge they are acting in their customers’ best interests and stopping foreseeable harm.
“That includes passing full information to financial advisers. Regulated advice leads to pension savers making better retirement decisions, and the FCA needs to recognise the role financial advisers play and make them much more central to the customer journey.
“Having a simple, streamlined, and engaging customer journey is paramount to whether the pensions dashboards are a success, or whether they fail by turning off consumers through frustration.”
In response to the consultation, AJ Bell has urged the FCA to return to the drawing board to redesign the rules using three key action points:
- Design and test the journey from the customer’s perspective. Pension dashboards have the potential to engage customers with their pension savings; we mustn’t allow a clunky journey to derail that goal.
- Pass full information from the dashboard ecosystem to FCA-regulated firms to allow customers to model outcomes and make decisions.
- Place financial advisers much more central to the customer journey, recognising the important role they play, including always giving the customer the option to send full information to advisers as well.
Background
What are the pensions dashboards?
The pensions dashboards will allow people to see details of all their pension plans in one place – including both state pension and private pensions. It will show which scheme or provider the pension is with, including contact details, as well as both the current value of the pension and what income it could provide at retirement age.
People will be able to access this information by accessing a dashboard offered by either the Money and Pensions Service (MaPS) or another company, for example a pension provider or employer or bank. They will have to enter some personal information, including name, address and date of birth. Once the dashboards ecosystem has this information it will check with most of the pension schemes in the UK to see if they have information for this person, and then show the individual what pension information it has gathered.
Who is building the pensions dashboards?
The DWP has given the Pensions Dashboards Programme (PDP) the job of designing and implementing the central digital architecture that will make pensions dashboards work. The PDP is also responsible for developing standards on how pension schemes connect to the pensions dashboards and how they show the information to people.
What is the connection timetable?
The majority of pension schemes have to ‘connect’ to the pensions dashboards to be able to share details of their members’ pensions. (Only very small schemes with less than 100 members are currently exempt.) All pension schemes have to connect by 31 October 2026 by the latest. But the DWP (Department for Work and Pensions) has published a connection timetable as guidance for schemes giving earlier dates for connection. This is to stop a large number of pension schemes all trying to connect at the same time, which would be disruptive for the overall project.
The first guidance connection date is 30 April 2025. This is for large firms that offer personal pensions (including SIPPs) and very large master trusts. The timetable then sets out several later dates for gradually smaller and smaller pension schemes.
Pension schemes have to make decisions about when they will connect to the pensions dashboards by looking at these guidance connection dates. If they choose a different – later – connection date then the regulators – either the Pensions Regulator (TPR) or the FCA – may investigate and want to know the reason why.
When can people view pensions dashboards?
The DWP will set the launch date of the pensions dashboards once it is sure enough pension schemes have connected to the pensions dashboards, and an individual has a very high chance of seeing all their pensions when they access the dashboard. If the ‘coverage’ of pension records isn’t high enough, the danger is people will lose confidence in the pensions dashboards if they request details but aren’t shown all their pensions.
The pensions dashboards also have to be working efficiently, are easy to work, and it’s simple to understand the information given.
What is the FCA’s role?
Offering a commercial dashboard is a permitted activity, meaning firms need to be regulated by the FCA as a pensions dashboard service (PDS) firm to do this. The FCA is currently designing the regulatory framework – the rules those PDS firms have to comply with. This includes the warnings and messages the customer will receive when they both go onto and exit the dashboard. It also includes the rules on how what they can do with the ‘view data’ detailing their pension pots – whether they can send it back to themselves or others, including financial advisers and the PDS firm.
