On 7 November 2024, the Financial Conduct Authority (FCA) published a policy statement, PS24/15, setting out the regulatory framework for firms that operate pensions dashboard services.

Key takeaways

The FCA has published its final rules and guidance for firms operating a pensions dashboard service (or ‘PDS’) in the future. Presently, MaPS operates the public (non-commercial) Pensions Dashboards Service, but changes to the regulatory perimeter earlier this year mean that private sector firms wishing to provide private sector PDS will need to have a specific FCA regulatory permission to do so (under A.89BA, RAO).

There is significant potential for private sector PDS’ to change the landscape of consumer financial services in relation to pensions and retirement saving. To get there, there will need to be further work by the Pensions Dashboard Programme to connect commercial dashboards to the MaPS dashboards digital infrastructure; and in the meantime the legal and regulatory landscape is likely to evolve further with the development and delivery of Open Finance and other initiatives.

The FCA’s paper explains how it sees private sector PDS’ operating in the wider pensions and data ecosystem, and sets out the rules and guidance to which firms will be subject when operating a PDS.

Whilst the delivery of private sector PDS’ may be some time away, the impact will be significant. Easier digital connectivity with pensions could radically change the overall landscape of provision; and has the potential to reconnect savers with an estimate £31.1bn in lost pension pots.

Firms contemplating a role in this future environment should take a close look at PS 24/15 to help plan for these new opportunities. It contains important feedback on consultation, including critical questions around interaction with the Design Standards; conduct of business rules and associated questions including the extent of permissible marketing within a PDS.

Background

The FCA first consulted on its proposed requirements for firms operating a pensions dashboard service in December 2022 (in CP22/25). After Parliament approved the legislation to introduce the new regulated activity of operating a pensions dashboard service, the FCA then published a further consultation (CP24/4) in March 2024, setting out further and revised proposals prompted by the drafting of the regulated activity and feedback to CP22/25.

The new framework

Under the new framework set out in PS24/15, the FCA will regulate firms that operate pensions dashboard services (i.e. secure digital interfaces that allow consumers to find their pensions and to view basic information about them). The regulatory framework is intended to enable consumers to confidently engage with pensions dashboards by making sure firms undertaking this new activity do not introduce or amplify the potential for consumer harm.

Next steps

The gateway is not yet open for firms to apply for authorisation or variation of permission to undertake the new activity of operating a pensions dashboard service. The FCA explains that it will not open the gateway until the Government and the Pensions Dashboard Programme have produced all the information necessary for a firm to design and build a pensions dashboard service. It confirms that it will give the industry adequate advance notice of the gateway opening, accompanied by the finalised application forms.

The rules are being published now to allow firms to start considering and preparing their prospective business models, service design, research and testing well in advance of the gateway opening to accept applications for the new permission.