EXCLUSIVE: “Stirring the Pots” – Rebecca O‘Connor, PensionBee and Richard Smith, Pensions Dashboards Operators Coalition in ‘The Insurtech Magazine’

In the UK, it’s estimated that more than £26billion is sitting in ‘lost’ pensions. Despite decades of digital progress to give consumers transparency on their financial health, that figure is still growing. So, whose problem is it to solve – and how?

October in the UK is Lost Pensions Month, when consumers are encouraged to rummage down the back of the financial services industry sofa for a missing £26billion in retirement savings.

How could we have been so careless? And why, in a digital age, is that stash of obscured cash still growing?

Savers themselves can be held partly responsible. Research carried out for the government in 2023, revealed that public attitudes to pensions could be summed up in three words: ‘detachment, complacency and fear’.

“That’s partly why I’m passionate about pensions dashboards,” says Richard Smith, the voluntary chair of the Pensions Dashboards Operators Coalition (PDOC), an industry-led body, set up earlier this year to accelerate development of the technology, infrastructure and standards.

“I don’t feel good that I have spent 35 years in a sector that has so little street cred.”

That’s a little hard. After all, working patterns have changed radically in three decades. Boomers were the first to reject the idea of a job for life; Gen Zers are predicted to have as many as 12 jobs over multiple careers. Which makes it even more urgent that they’re able to track pots of retirement cash quickly and easily.

“Changing jobs means leaving behind an old workplace pension if you were auto-enrolled, and if you change jobs frequently those pensions may be relatively low value,” points out Rebecca O‘Connor, director of public affairs at PensionBee. “The temptation is then, when you lose track, to let it slide, but actually it all adds up and a pension that was worth £2,000 when you were 25 could end up being worth an extra £10,000 when you retire. ”

And with 30-40 per cent of working adults not paying in enough to give them a decent standard of living when they take it out (according to research in August for the government’s Pension Review), they certainly can’t afford to ‘lose’ any of it.

“We don’t yet have an easy solution for the lost pensions problem in the UK, despite the pensions dashboard programme, which is taking forever, and despite fintech, which, in theory, makes solutions to such problems easier,” says O’Connor.

“All the pensions providers are investing more than I have seen over the past 30 years to get ready for this”

Richard Smith

Some of the UK’s closest neighbours, culturally and geographically, are way ahead of us in building the digital architecture and regulatory framework needed to not only keep track of retirement funds, but motivate savers to actively take an interest in them. Denmark was the first to launch a single, government-run portal, through which consumers can view and manage all their pension pots.

The Netherlands, Belgium and Sweden offer a similar public service. Norway took a slightly different approach. Its government set up a central data retrieval gateway into which commercial dashboard operators, such as personal financial management and banking apps, connect through APIs, triggering a one-time request for information from pension providers. Perhaps it’s no great surprise that the average Norwegian checks in on their pension 10-times a year, compared to once or twice a year in countries where the information is only available through a single dedicated interface.

It’s the Norwegian-style system that Capgemini is currently building for the UK government under the Pensions Dashboard Programme, which will be managed by the Money & Pensions Service. Starting in April 2025, all pension providers must have the systems in place to respond to data requests initiated by savers using the Gov.uk One Login, sending a prescribed package of information back to the dashboards.

That will, finally, reveal just what we’ve got and where… at least, that’s the theory.

As Smith says: “There are 100 billion pension investments across 3,000 providers that have been built up across decades. The big question mark is over the quality of the data. But all of the pension providers are investing more than I have seen over the past 30 years to get ready for this.

“They need three things – a technology partner to build API connections; to be able to respond to ‘find‘ requests; and they have to be able to send a prescribed set of data back to the customer. And it all requires pension records to be correct. The challenge will be the quality of data-matching done by the provider.”

Up until now, says PensionBee’s O’Connor, there has been ‘some intransigence and some difficulty with gathering data from older legacy pension books’.

“It shouldn’t be this hard, but it is,” she says. “It’s fair to say some parts of the industry are more invested in keeping things the way they are rather than enabling people to have full visibility and control. To be able to see all of your pension details in banking apps would require pension providers to share and integrate that data with other institutions. Currently they don’t have the commercial incentives to pursue this. This is why pensions dashboards are, in theory, a good idea.”

Under the new rules, which must be fully adopted by autumn 2026, institutions will have no choice but to release the data. Commercial platform providers like PensionBee and Moneyhub, who have already joined the PDOC alongside some of those major pension providers, are keen to develop the APIs and earn their pension dashboard operator’s licence from the Financial Regulation Authority.

But the Money & Pensions Advice Service’s consumer-facing MoneyHelper, which will act as the government’s own dashboard, will likely be the first to go live. “As in Norway, I think it’s important that there is what you might call a ‘BBC of pension dashboard operators’ to instil trust, the ones that anyone can go to without an app,” says Smith.

Wake-up call

Auto-enrolment, generally seen as a success in the UK, ensured that employees were at least contributing to a pension after 2012. But it requires nothing to be done on the part of the saver, except sacrifice pay through the payroll scheme.

“A lot of people don’t even know they are enrolled,” says Smith. “Digital engagement with the employer’s pension provider has been very low – less than one in 10.”

The concept of pension dashboards is based on the same saver inertia.

“Pension dashboards are designed on the premise that most people do not know where their pensions are – so you just press a big search button and the industry does all the heavy lifting for you,” says Smith.

“We don’t yet have an easy solution for the lost pensions problem in the UK “

Rebecca O’Connor

But it’s at that point, when savers can see exactly how their retirement plans are panning out (or not) – in the same app that they use to do their everyday banking or manage their budgets – that Smith predicts there will be a sudden demand for additional information, services and support. Chief among those is likely to be more demand to consolidate pension pots to make investments work harder for savers. It will also reduce the number of very small, expensive-to-maintain investments that are lying – often ‘lost’ and unloved – across the industry.

“Consolidation in the sector will help to promote value for money and should ultimately help to simplify pensions, too,” says O‘Connor. Smith points to another important change in legislation, the UK’s Consumer Duty Act, which will force pension providers to sweat data to understand more about individual customers and respond to their needs appropriately, says Smith.

Take the example of two women with £1,000 each in a pension, one with a mortgage paid off in full, married and with income from additional investments, and one single and in rented accommodation with no other financial assets. Currently, the optics on those customers mean providers treat them identically when clearly their retirement planning needs are very different. In Australia, in fact, government mandates that pension providers gather just such third-party information on customers to give them a holistic picture of their retirement needs.

For O‘Connor, change is long overdue. “The problem of lost pensions should have been solved years ago,” she says. “The government’s Pensions Review is also a great opportunity to focus on value for money for savers and place retirement outcomes front and centre of future policy changes. The big risk is that the interests of UK plc in using pension funds for growth are put first and this could be to the detriment of savers, if value for money isn’t also prioritised. This will involve a strong focus on potential returns but also keeping asset management costs down”.

For a package of reforms that could have such a fundamental impact on the quality of millions of people’s (generally much longer) lives in retirement, there has been very little communicated so far to the average job-hopping Gen Zer, building up pots of pensions in their wake, nor the wider the financial services industry that will be touched by the consequences.

The UK’s experience with open banking, with its disappointing rates of adoption six years after its introduction, has shown that it requires sustained, simple messaging when it comes to driving change among consumers, while industry needs commercial incentive. And, as Smith points out: “This is way bigger than open banking.”

This article was published in The Insurtech Magazine Issue 11, Page 14-15