The two fintechs are calling on the FCA to speed up the introduction of Open Finance to help people view their pensions all in one place.
In a report published by the pair yesterday, Plaid and PensionBee are calling for ‘open pensions’ to be made standard, something which they claim will “improve financial decisions” and “bring more immediate value to savers than the government-led Pensions Dashboards project.”
The report, which has also been supported by industry body Innovate Finance, calls on the Financial Conduct Authority (FCA) to recognise that both the government-backed Pensions Dashboard and the pursuit for open pensions can be developed in tandem with one another, rather than separately.
Research published by PensionBee just before the start of the pandemic found that savers would find just six out of ten of their pension pots when logging on to the Pensions Dashboard for the first time.
Clare Reilly, head of corporate development at PensionBee, said: “Of all the possible verticals to be brought into Open Finance early, pensions need 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.”
The amount of ‘lost’ pensions in the UK has been estimated to be around £20bn, largely due to the fact that 80 per cent of people leave their pensions behind when they leave a job and 60 per cent don’t know their current pension balance.
Kat Cloud, Policy at Plaid, commented: “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.”
Earlier this week it was revealed that now over 2m people in the UK use open banking in some way, double the amount of people using financial APIs just six months ago.
Iana Vidal, head of policy & government affairs at Innovate Finance, said: “As we look to widen the benefits of this innovation through Open Finance, this new report makes a compelling case for an approach that starts with pensions, as the area of highest impact and reach within the financial services sector.”
“With millions of adults now regularly saving into a pension, we should be using innovative fintech solutions to help people make informed decisions about their financial future, and this report provides policymakers with a clear roadmap to achieving this.”