Time for a tech shake-up? APP-arently the time is now…Kate Smith, Head of Pensions 6 October 2016 Back to results
With news of a shake-up in the world of retail banking in the UK, now’s a good time to revisit how technology could help people to change their saving behaviours for the good.
Open Banking…in a nutshell
You’ve probably read a lot in the past week about the government’s decision to introduce the ‘Open Banking Programme’, but if not, here it is in a nutshell. The programme, led by the Open Banking Working Group, is designed to force the banking industry into the modern world.
Aimed at helping people manage their money in better ways than before, the programme forces banks to share their data securely, providing that their individuals give permission. (Don’t worry, you won’t have to do this, if you don’t want to).
For customers who opt in, their data will be shared with third party developers in order to allow them to create digital services and tools. These (hopefully, innovative) tools will help customers find the most competitive deals and make the most of their money.
The requirement to open up data held by banks, albeit dependant on consumer preferences, could encourage start-ups and technology companies to approach finance from a more innovative angle. In theory, this should open up a market driving competition which, to date, has been dominated by the bigger banking players in the UK.
Alasdair Smith, chair of the Competition and Markets Authority (CMA) retail banking investigation said that"reforms will increase innovation and competition in a sector whose performance is crucial for the UK economy."
How do you use your smartphone?
While digital banking is hugely convenient and has made a significant difference to the way people manage their money, more and more people are using their smartphones to manage daily tasks. Think about how you might use your phone; to make a payment, to order your food shopping for the week, to book a holiday or track your sleep. So, why not for saving?
Managing your pension online
While online banking is very common, with smartphone banking now on the rise, in the past pension savers haven’t been able to manage their pension savings online, due to lack of technology. While there are government led industry initiatives already underway to create a ‘pension dashboard’ - essentially an online dashboard that will allow people to see all their pensions in one place – at Aegon we’re ahead of the curve.
Retiready gives you the option to view your savings, set your retirement goals and withdraw your pension online. By using some simple online tools, you can assess how ready you are for retirement and make lifestyle choices to help you make informed decisions.
By inputting all the details you have on your various pension pots and your state pension, you can see how close you are to achieving your goals, what steps you might need to take to change your saving habits and get a sense of the overall picture.
Although not the same as opening banking, this does enable people to compare their various pension pots and evaluate how they save in a more digital way.
Pensions can be tricky to track and at least 37% (Aegon Pension Survey Report, 2015) of us have more than one pot built up with different employers. In the future, it’s estimated that people on average will have 11 jobs during their lifetime. Thanks to auto-enrolment, each of these jobs will result in a pension pot, and while this is hugely beneficial in the long term, it does mean that it could become increasingly difficult for people to track their retirement income and work out the total value of their retirement savings.
A pension dashboard like Retiready could well be the key to simplifying retirement saving further, and with it, encouraging people to take more of an interest in their savings. Having an overview of all your pensions, including the State pension, online and easy to access in one place is a great way of assessing if you’re on track for the retirement you aspire to. And if you’re not on track determining what more you need to do with the help of online tools.
Our 2015 Pension Survey Report revealed overwhelming support for a pension dashboard of some sort, with a massive 91% of customers saying they’d find the initiative useful. All pension saving is valuable and the issue of lost pensions needs to be relegated to the past.
Coupled with digital ways to manage your pensions, innovative apps could encourage people to have a greater desire to save and save more effectively. As technology forges ahead and the digital revolution starts to enter every aspect of our daily lives, people will expect to engage in the same way with their savings for retirement.