Biggest threat to our pensions is ticking time bomb – and it’s not Rachel Reeves | Personal Finance | Finance
This time last year I attended a pensions conference where technology was discussed. What I heard shocked me.
As a reporter I have to remain impartial. We have to write up what was said, not necessarily what it means.
But this week words I previously reported have come back to haunt me: “Shocking tech leaves us in a precarious position.”
That was spoken by a pensions industry expert, before the Labour government had been elected, so Chancellor of the Exchequer Rachel Reeves can rest easy, for now.
But she might want to read on because there is something she needs to know, and can do something about
The pensions sector has long been known to have built up a ‘technical debt’. This ‘debt’ means that it is so stuck in the past it can’t move on to things like engaging and educating savers.
It’s so busy faffing around getting things straight that some of the really good stuff, that our pensions industry is capable of – auto enrolment being one of them, is not getting done.
At the Pensions Administration Standards Association (Pasa) conference we heard that pension systems have ended up “like a jigsaw, so that when you move it you lose little bits of data”.
One speaker said: “We have some good tech and we have some shocking tech, but that shocking tech leaves us in a precarious position.”
Just how precarious this could leave us is open to question but we may be witness to what happens when tech goes wrong. In the last four weeks several major banks have experience serious outages – or ‘gone down’ on crucial days of the month.
The Barclays app outage at the end of January – the first payday after Christmas for millions of Brits – was so bad some people struggled to pay bills and pay for their food. There were a couple of examples where people’s house purchases were threatened.
And today – February’s payday and just when we are getting straight after the excesses of the festive season – Nationwide, Lloyds, TSB, First Direct and Royal Bank of Scotland all had problems.
When I was at the pensions conference the tech used by banks was lauded as an example for the pensions industry to follow.
Delegates at Pasa said the pensions industry could learn a thing or too about the success of open banking, where you can see your pension and all your other bank accounts, credit card debts, mortgages and loans all in one place.
Banks are much more dynamic than pension companies. Pension systems are a mess, there are still so many different types of pensions that have to be adminstered and regulated.
My fear is, if the tech being used by the banking industry can fail so easily, on a day when we all need to access our accounts, then how safe are our pensions.
It may be the reliance on paperwork – some pension companies still use faxes (and some of you reading this will be scratching your head at that wondering what a ‘fax’ is) – that our pensions are safer in some ways.
I really hope so.
And yes, let’s hope that the dashboard project means our pensions industry tech is finally dragged kicking and screaming into the 21st century where it belongs.
