The Financial Conduct Authority (FCA) has published new rules for firms operating commercial Pensions Dashboards, requiring them to meet specific authorisation and regulatory standards focused on consumer protection and engagement.
According to the new FCA rules firms operating pensions dashboards (PDS) must adhere to high standards, including compliance with the FCA’s Principles for Businesses and Consumer Duty. The rules emphasise scam prevention, clear disclosures, and safeguards against high-pressure sales tactics.
It also mandates that companies provide customers with clear choices and additional instructional materials to help them make pension decisions. These guidelines are intended to protect users from exploitation while fostering a secure environment.
Users would initially only be able to access their information via the government’s Money and Pension Service (MaPS) Pensions Dashboard, according to a recent confirmation from Pensions Minister Emma Reynolds.
Although no timeframe has been specified, the ultimate goal is to let commercial dashboards operated by private-sector suppliers. The goal of pension dashboards is to provide people with a single, digital view of all of their pension plans.
According to the FCA, future updates to regulations may be needed as broader financial initiatives like open finance and small pension pots evolve.
The FCA says: “We want PDS to be platforms where consumers can confidently and positively engage with their pensions and be safely supported in retirement planning.
“If consumers lose confidence in dashboards, due to firms not acting in consumers’ best interests, we risk losing the opportunities dashboards offer and the ability to build on this in the future.
“We consider our framework of rules is proportionate for the first iteration of dashboards. But we also see the potential for dashboards to develop into, or contribute to, something more sophisticated over time.”
AJ Bell head of public policy Rachel Vahey says: “Pensions Dashboards have the potential to be crucial in helping people plan and save for retirement. A dashboard will give people an overall view of all their pension savings built up so far – where they are, how much they are worth, and what level of retirement income they could expect.
“This statement is helpful but leaves the pensions industry with only a set of rules and no definitive timescale for when commercial dashboards will become a reality. Setting a clear date for commercial dashboards would allow providers to start planning in earnest. The development of dashboards has already been a bumpy ride with numerous stops and starts, and changes in who is responsible for getting it over the starting line.
“But more importantly, this is a huge let-down for customers. Dashboards have the potential to empower pension savers. But instead of a single government outlet, they need to be offered by a wide variety of organisations to make sure as many people as possible can reconnect with their lost pensions.
“Setting in stone a date for commercial dashboards will offer a clear path forward, allowing millions of people to view all their pensions in one place simply, easily and quickly.
“The pensions environment is continually evolving and the FCA should regularly review these rules so they are suitable for tomorrow’s world when targeted support is expected to play a much more important role.
“The FCA has adopted a cautious approach, but this could come at the cost of simplicity and practical help. Parts of the consumer journey are still laborious, and not designed from the customer’s perspective.”