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October 07, 2020

Building a better future for UK savers

Kat Cloud

There’s no financial sector in the UK in greater need of innovation than pensions. Every working individual in the union is automatically enrolled in a pension scheme, making pensions the largest asset most people will have other than their home. Yet basic information about costs, charges, and performance can be hard to find.

Almost 60% of pension savers don’t know their current balance, and 80% leave their pension behind when they switch jobs. As a result, pensions are one of the most commonly misunderstood financial product in the UK, with very low levels of customer engagement.

The government-led Pensions Dashboard aims to reunite pensioners with an estimated £20 billion in lost pensions. But this alone isn’t enough. The expansion of open banking to open finance must give savers ownership and control over their pension information--open pensions.

That's why Plaid teamed up with Innovate Finance and PensionBee for a joint report on how open pensions and open finance can help UK consumers build a better future.

Based on what open banking has achieved, we foresee a future where open finance will transform an abundance of products and services across financial services and beyond. For pensioners, this would provide a basic right to access their data in a way that’s currently impossible. As a result, savers will have real ownership of their pensions, better tools to make the most of their money, and, ultimately, happier retirements. Only through open pensions will consumers achieve the necessary benefits of ownership, thereby enabling them to make informed decisions, take advantage of digital tools, and better manage their retirements. But we don’t yet know when or if open pensions will happen—we need regulators, industry, and providers to work together to make open pensions a reality.

What we do know is that with open finance consumers and small businesses gain more control over their financial data and receive more powerful and affordable services in return. No component of financial lives  needs this more than pensions.

To learn more about Plaid, PensionBee, and Innovate Finance’s joint vision for open finance and open pensions, download the report at the link below.