Just five years ago it would have been almost impossible to imagine a scenario where we, as consumers, could have full control over our money and financial data in the way that we do today.
Despite the term “fintech” dating back as far as 1971, widespread innovation in financial services has been painfully slow, and it wasn’t until the arrival of Open Banking in 2018 that the status quo well and truly started to change.
Open Banking has blown the financial services industry wide open, increasing competition and forcing disruption in sectors that haven’t adapted to meet consumer demand. For the first time, consumers get to choose who can use their financial data, and in what way, forcing companies that are focussed primarily on themselves to shift their attention to their customers, simplifying financial products and creating much-needed solutions.
The arrival of apps to help us unlock spending data and make our money work harder, while empowering us to make smarter financial choices, has been revolutionary.
We’ve only reached the tip of the iceberg when it comes to Open Banking technology and will continue pushing the boundaries of what’s possible for pensions, giving even more control back to consumers and achieving our ambition of making pensions truly simple.
PensionBee was the first pension provider to apply Open Banking technologies to pensions – helping our customers see their complete financial position, with their live pension balance displayed alongside their live current account balance in some of the UK’s most popular money management apps, including Yolt, Moneyhub, Emma and Starling bank.
We’re pleased to see that PensionBee isn’t the only one innovating in this space. Several of the more traditional financial services companies are getting in on the action; Lloyds Bank customers with a Scottish Widows pension can see the value of their pot when they log into their bank account online and Moneyhub, a personal finance application that PensionBee has integrated with, can also show the balances of other major pension providers such as Aviva and Aegon.
More recently, pension administrators like Mercer have started white-labelling personal finance management applications like Moneyhub to offer dashboard-like services to those who are auto-enrolled.
When it arrives in a few years’ time, the government’s Pensions Dashboard will enable consumers to see all of their pension information online, in one place. This increased transparency and control will ensure consumers don’t lose track of their hard-earned savings and can better plan ahead to ensure a comfortable retirement in later life.
In September I was appointed to the Pensions Dashboards Industry Delivery Steering Group, alongside nine others, with a mandate to help deliver pensions dashboards to millions of consumers effectively and safely.
I believe that complete dashboards, which include data on all pensions, are unlikely to be available before 2025. In the meantime, there are lots of pension calculators and useful retirement forecasting tools that can help better prepare savers for retirement.
A pension calculator can help consumers work out how much they need to save to fund the retirement they want. All they need to do is input a few details such as how much they have already saved, the amount they are planning to contribute and the age at which they would like to retire.
Most calculators will provide the option of including the state pension in the calculation, so savers can see a realistic estimate of what their income is likely to be. It is advisable to try a few different calculators and most major pension providers, including PensionBee, offer a free tool for consumers.
New tools such as this are revolutionising how we interact with our pensions, allowing consumers to build the financial futures they deserve.
Romi Savova is chief executive of online pension provider, PensionBee