View more on these topics

Adrian Boulding: We need a property portal for pensions

Boulding-Adrian-2012-700x450.jpgI stopped to look in a local estate agent’s window recently and was surprised to see they persist in covering up the prices of sold properties.

That was common practice when I bought my first house 30 years ago but it was all about protecting the mystique that estate agents were the only ones that “knew the market”. Today, you can log onto a variety of websites and see what a property sold for.

We are naturally curious when a neighbouring property sells. Before the internet, establishing the price involved hushed conversations among the neighbours, Chinese whispers and wildly differing answers.

In a way, pensions are in a similar position. If you are a member of a final salary pension scheme (probably a deferred member nowadays) it is obliged by law to answer just once a year to your request for a transfer value, and a number of schemes stick to that.

The pensions dashboard may be our answer to online property valuation sites. If it gets the legislative force behind it that it needs, there will be a variety of convenient and trusted dashboards consumers can go to to get the value of their pension at the click of a mouse. No more guesswork or Chinese whispers.

That said, knowledge is of little use without interpretation. A few financially sophisticated people will be able to project forward their pension, foresee their income needs in retirement and then perform some form of actuarial or stochastic calculation to find out if they are in a good place.

But most people will skip the complicated calculation and just ask how they are doing compared with their peers. Here, again, online property portals are ahead of the game.

Once my work colleague has let on that they live at number 4 Privet Drive, for example, I can log on to a property portal and it will tell me what they paid for their house, how long ago and, importantly, its current valuation in today’s market condition. Straight away, I know whether I am keeping up with the Jones.

This is not just being nosey. Our research paper, Can Housing Wealth Save the Day?, found that half of over 50-year-olds expect to utilise housing wealth in some way to supplement their pension. So it is common sense to make sure you have got enough of it and what better way than to compare with how your peers are doing.

We would like to see this on a wider front. It would be great if consumers could get a “people like you” figure from their savings provider. A portal that takes some basic parameters from them, then returns an answer that households like theirs typically have total savings of £x, broken down into pension, housing equity, medium-term savings like Isas and short-term cash deposits.

For a long time, our industry has been searching for the equivalent of “eat five fruit and veg a day”. While finance is too complicated to have such a simple rule of thumb, it would be helpful if consumers could easily compare their current savings tally with similar people to find out if they are safely in the middle of the crowd or sitting uncomfortably as an outlier.

Adrian Boulding is director of retirement at Tisa


Understanding the FCA changes to pension transfer rules

The FCA has begun consulting on changes to its requirements around advice on pension transfers where clients have safeguarded benefits; in particular, defined benefit transfers. The proposals seek to recognise that the economic and legislative environment has changed significantly. If you are active in this market, you can contribute by completing the online response form […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Richard Anderson 24th July 2017 at 3:50 pm

    I like the idea, but the vast majority of society today have relatively little by way of savings, investments or pensions, so re-assuring them that they are ‘keeping up with the joneses’ will only serve to give them a false sense of security that they are ‘doing OK’. Financial Advisers don’t tend to tell their clients that they have a similar amount to other clients, instead they look at the client’s anticipated needs, calculate shortfalls and then seek to ‘fill-the-gap’. In this way, with encouragement from the FA over time, the client gets as close as possible to their target amount, rather than matching the £20k pension pot and £2k ISA that Charlie next door has got.

Leave a comment