Transforming UK Pensions Landscape - The role of QPDS under the Pension Dashboard Program

As per the latest survey, one in four people has lost track of at least one pension in the UK, with almost three million pension pots left unclaimed. The estimated combined value of these unclaimed pensions is a staggering £26.6 billion1. Thus, a pressing need was long felt by the authorities and pension holders in the UK for a program that helps consolidate and simplify access to pension information across multiple pension providers, helping individuals better manage and plan their retirement savings. Consequently, the Pension Dashboards Program (or the “PDP”), an innovative UK government initiative was launched in 2016 which sought to transform how individuals in the UK access and manage their retirement savings. The PDP was eventually formally established in 2019 under the governance of the Money and Pensions Service (MaPS) and all the pension providers in the UK were mandated to provide pension data to the PDP as part of the Pensions Schemes Act 2021. The PDP was tasked with coordinating the efforts across industry participants, setting up the various technical and data standards needed and delivering the digital dashboard infrastructure ensuring data security and privacy.
The pension dashboard is working towards first connection date in April 2025, however as per the latest progress report2 in the PDP website, the first set of volunteer participants shall be onboarded as early as August 2024.
At a high level, the PDP proposed digital pension ecosystem consists of 3 main components,
- The Pension Dashboards. These are authorized apps, websites or other tools that help individuals access and view all their pension information in one place. The organizations planning to build these dashboards as commercial offerings need to get permission from the Financial Conduct Authority (FCA) to run a qualified pension dashboard service (or a “QPDS”).
- The Central Digital Architecture. This is the heart of the ecosystem. It consists of various services that perform critical tasks like authentication of user credentials, managing user consents and authorizations, governance of registered participants, orchestrating the “find pension” activity etc. This architecture will be implemented by the PDP.
- The Data Providers. These are the pension providers/administrators who have been mandated by law to provide the pension data when requisitioned by the digital ecosystem.

In this article, we will explore briefly what is a QPDS in the context of the PDP program, which firms may likely operate a QPDS service, why it may be beneficial for firms to apply for a QPDS, what is needed to get a QPDS approval and finally, our view on whether it is worth the time and money.

What is a QPDS?
As mentioned earlier, QPDS is a service that allows pension holders to view all their pension information online in a secure way. All the digital interactions between QPDS and Pension Providers are made possible through the Pension Dashboard digital ecosystem. A high-level schematic of the digital ecosystem (as per the official PDP website) is shown below,

As is evident from the picture, QPDS connects the user with the pension ecosystem. It receives and displays the pension information (which includes administrative data, signpost data, value data and contextual data provided by pension providers and schemes, as well as the State Pension data) sent over by the pension data providers. As per the PDP, “…dashboards should be engaging, accessible and inclusive whilst presenting pensions information in a clear and comprehensible manner”. The PDP has published elaborate design standards3 for the presentation of the pension data and design of the dashboard. However, within the ambit of the design standards, there is scope to tailor the dashboard offering and communications to reflect the QPDS provider’s unique customer demographics.

Who can be a QPDS provider?
In the current state, no firms are mandated to be QPDS providers in the UK. It is our view that becoming a QPDS will be a necessity to protect existing AuM/AuAs as well as represent a commercial opportunity to drive future growth and benefits, especially for the following market participants.

Pension Administrators and Providers. These firms have a direct interest in offering userfriendly pension dashboards to enhance their service offerings. QPDS can enable them to provide better transparency and engagement tools for their existing clients and help attract new ones.
Financial/Wealth Advisory firms. The financial advisers as QPDS providers will be able to offer more holistic and detailed financial and retirement planning services by integrating the pension data into their advisory platforms, thus ensuring comprehensive service and deeper relationships with their clients.
Fintechs. These firms thrive on technology-driven innovation and user-centric solutions. QPDS may serve as an opportunity to leverage their expertise in UI/UX design, data analytics and technology to create compelling products. They may also partner with traditional players (pension providers, financial advisers, insurance firms etc.) which could work as a win-win situation for both.
Insurance companies. Many Insurance companies offer pension products and annuities. By providing a dashboard, these firms can enhance client engagement and cross-sell other insurance products, thereby increasing their market share.

Why be a QPDS provider?
There are several persuasive reasons to pursue the QPDS qualification, a few of which are listed below.

1. Competitive Advantage
Being a QPDS could help a firm differentiate from its competitors. A QPDS provider can integrate with other financial planning tools and open banking platforms, allowing customers to see their pension data as part of their wider financial picture. For Ex. a customer can be shown their assets and finances like savings, investments, mortgages etc. alongside their pensions both at an individual or at a household/family level. This powerful capability opens significant opportunities for businesses to support,
- customers who wish to consolidate their retirement planning thereby accelerating the growth of assets under management (AUM) for the QPDS provider.
- cross selling opportunities across related services and products like investment services, insurance policies and financial planning tools etc.

Moreover, access to pension data from multiple sources allows firms to gain valuable insights into customer behaviour and preferences. These can be useful in strategic decisions, product development and marketing strategies.

Conversely, not providing a QPDS may lead to reputational loss as the competitors may begin to offer QPDS service. The firms that do not onboard the QPDS boat risk being seen as regressive and lagging the innovation curve.

2. Enhanced Customer Engagement and Experience
Unlike days of yore, when people used to stick with an employer throughout their lives, they tend to shift jobs more often now. It is estimated that a person will switch their employer as many as 11 times in their lives. Each of these jobs could have an associated work pension. Moreover, the individual may additionally have state and/or private pension pots as well. This leads to multiple types of pensions, each with multiple pension pots getting frequently created and often forgotten. Pension dashboards aim to simplify this complex pension landscape for the pension holder by consolidating pension information across all these multiple sources. A QPDS offering may further take this pension solution a step forward for their customers in the following ways,
- Clarity. Consolidation of pension data and possibly other finances via open banking would provide the clients with a clearer picture of their current financial situation. This enhanced visibility would enable the providers to empower their customers to make informed decisions about their future contributions, withdrawals and investment strategies.
- Personalized Service. With access to actual financial data (including pension data), financial advisers would no longer depend on anecdotal data from the clients and can offer more tailored and accurate data-driven financial advice to clients. They can provide tools and projections that help clients understand all possible scenarios and select the most optimal investment strategy.
- Proactive Management. The insights from pension data can help financial advisers proactively manage customer retirement plans, adjusting strategies as needed based on market conditions or changes in personal circumstances.
On the other hand, firms that do not offer QPDS to their clients will have to direct their
customers to the default dashboard offered by MaPS. However, this would lead to missed opportunities to actively engage with clients regarding their retirement planning, which may cause a loss of customer primacy to the competitors. A lack of holistic financial planning services may eventually force customers to consolidate their financial planning away from such firms.

3. New Customer Acquisition
Firms offering QPDS service may attract new customers by allowing them to view their pension data as a free service. This can help build trust and foster new relationships with potential customers. The QPDS firm may leverage innovative post-view services, tools and calculators to engage potential clients by giving them a statistical analysis and projections of their pension data, highlighting strengths, weaknesses and opportunities for improvement. Firms may offer prospective customers personalized advice and educational sessions on topics like retirement planning, investment strategies etc. helping customers make informed decisions regarding their financial well-being.

How to be a QPDS provider?
There is a well-structured process that needs to be followed to be able to apply for a QPDS qualification. As per the PDP, there are several requirements a prospective QPDS provider must meet.

1. Obtain Financial Conduct Authority (FCA) Authorization
Any firm that wishes to operate a QPDS must be or become FCA-authorized and obtain regulatory permission to do so. The threshold conditions and high-level standards can be referred to in the FCA handbook4 that apply to all FCA-regulated firms. FCA has a deadline of 12 months to determine the validity of the application from the time they receive the initial application.

2. Adhere to all MaPS Standards
MaPS has developed and published the standards5, or the rules and controls to facilitate the connectivity with the pension dashboards ecosystem. The prospective QPDS provider needs to conform to these standards to ensure seamless integration and compliance with the digital pension ecosystem. This includes (but not limited to) the following,
1. Build the Application Programming Interfaces (APIs)
Developing the technical connectivity with the digital pension ecosystem needs to be carried out in accordance with the detailed technical and security standards defined by the PDP program for secured data exchange. Further, rigorous conformance testing is to be conducted in collaboration with PDP staff in a “sandbox” environment to ensure robust and stable connection before going live in production.
2. Build the User Interface
The QPDS display screens need to be compliant with the design standards published by the PDP that set out requirements for the presentation of the pensions data on dashboards and the design of the dashboards, including messaging, signposting and onward customer journeys.

3. Ongoing Operations, Reporting and Audit
Once the QPDS service is live in production, the firm is required to provide service-related informational reports to regulatory bodies like PDP and DWP (the Department for Work and Pensions) compliant with the PDP reporting and connection standards to monitor the effectiveness and health of the ecosystem. Moreover, the QPDS firm needs to enable annual audits by an independent expert third party to assess their ongoing compliance as defined by the various PDP standards.

Conclusion
The pursuit of a QPDS qualification within the larger PDP program represents a strategic opportunity for progressive financial firms. From the looks of it, QPDS providers will be able to offer a lot of value-added services to the customers as the PDP program evolves in the future. It does have its share of challenges in the form of navigating a complex permissions landscape involving multiple government agencies, upfront investments without any guaranteed ROI, adhering to ever-changing standards, the uncertainty of the program in the future etc., but despite all these hurdles, QPDS qualification may still prove to be a worthwhile investment in the short run and an utterly indispensable one in the long. The benefits of enhanced credibility and trust, competitive advantage, enhanced customer satisfaction and engagement, increased operational efficiency etc. that come along with the QPDS badge far outshine and outweigh the evanescent drawbacks apparent while pursuing it.

References
1. https://www.mercia-group.com/mercia-news-and-blog/lost-pension-pots/
2. Progress update report | Pensions Dashboards Programme
3. https://www.pensionsdashboardsprogramme.org.uk/standards/design-standardsconsultation/
4. https://www.pensionsdashboardsprogramme.org.uk/consumers/consumerprotection/
fca-regulation/
5. https://www.pensionsdashboardsprogramme.org.uk/standards/#standardsbanner