Nikhil Rathi FCA CEO Credit: FCA
The transparency provided by the pensions dashboards could be a catalyst for greater engagement and changes in consumer behaviour, Financial Conduct Authority (FCA) chief executive Nikhil Rathi has said.
Speaking on Friday (20 March) at the JP Morgan Pensions and Saving Symposium, Rathi talked about how technology is increasingly "changing the pensions conversation" and had the potential to transform how consumers see their pension saving.
But he said the pensions system must be ready to support a wide spectrum of consumer behaviours and support needs – noting that from well-designed defaults to targeted support and simplified advice, firms and policymakers must "empower consumer agency, while ensuring appropriate guardrails are in place".
He also said that retirement decisions were increasingly interconnected across pensions, housing and wider financial resilience – adding that, as consumers consider their financial futures more holistically, the system must work together to support informed long-term decision making.
Rathi said: "Dashboards will soon allow tens of millions of people to see their pension wealth in one place for the first time. We can't predict exactly how that might change behaviour and some, the first time, will simply look and move on.
"But experience across financial services – such as with auto-enrolment and open banking –suggests that when information becomes easier to see and understand, consumer engagement often increases."
He said the practical first step for dashboard users would be reaching out to pension administrators to confirm and update basic personal details – a move that he said would be a significant test for the system.
Rathi said: "We have to ask ourselves: with tens of millions of pots suddenly becoming visible, are administrators doing enough to prepare for a significant increase in queries? And considering the quality of the customer experience they provide?"
Behavioural shifts
Rathi also said that, as people re-connect with lost pension pots, the industry should also expect more interest in consolidation and transfers – something he said made it particularly important this part of the market was functioning well.
He said the FCA's Financial Lives Survey showed many customers do not take investment options, costs or other factors into account when transferring – adding the FCA was "concerned" existing processes do not always support meaningful comparison between schemes, particularly for non-advised customers.
He said: "The challenge is not simply providing consumers with information; it's providing the right information in a way that supports understanding of long-term consequences."
Rathi added seeing accumulated pension savings alongside state pension forecasts in a dashboard, could be quite a "profound moment of realisation for many".
He said some will be prompted to act – whether it is upping their contributions, questioning investment strategy, or re-thinking target retirement age.
Rathi noted: "The pensions system will increasingly need to cater to a spectrum of behaviours and support needs.
"A question for us – as policymakers and industry – is whether we are ready to accommodate more active engagement where it arises. And to do so at pace."
