PensionBee and Plaid call for introduction of ‘Open Pensions’

PensionBee and Plaid have released a report that calls for regulators to prioritise the inclusion of pensions in Open Finance over other sectors.

The Open Pensions and Open Finance: building a better future for UK savers report explored the potential for Open Finance in pensions, following the Financial Conduct Authority’s (FCA’s) call for input that closed today (1 October).

It called for the introduction of ‘Open Pensions’, which PensionBee and Plaid stated could help consumers improve their financial decisions and better plan for retirement.

Furthermore, the report suggested Open Pensions could bring more “immediate value” to savers than the pensions dashboards.

It described ownership through Open Pensions as a “distinct and urgently needed policy objective” that will help consumers take advantage of more digital tools and prepare for their retirements.

The firms urged the FCA to recognise that Open Pensions and the dashboards are for different target groups and should be allowed to develop in parallel with one another, rather than sequentially.

“Lack of engagement with pensions is a ticking time bomb for UK society,” commented PensionBee head of corporate development, Clare Reilly. “If we do not address this early enough, millions of people could retire into poverty with no guarantees the state can support them.

“Of all the possible verticals to be brought into Open Finance early, pensions needs to be staged first by every measure: consumers are being asked to take responsibility for their retirement, but yet still have no access to the basic standardised information required to make decisions, like charges or performance.

“By mandating pensions to go first in Open Finance, the FCA can bring the urgent regulatory intervention savers need, in a data format they understand, early enough to make a difference.”

Plaid UK policy lead, Kat Cloud, added: “Open Banking paved the way for consumers to take control of their finances, but it didn't go far enough.

“Open Finance is the next step; it will open up more sectors for innovation -- and, ultimately, bring consumers more choice, convenience, and ease when it comes to managing their finances.

“In the UK, there is no other sector that could benefit from open finance than pensions. More and more UK savers run the risks of retiring into poverty because of the lack of resources available to help them understand and use their pensions properly.

“Open Finance can change that, but we need regulators to set out the next steps.”

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