An exciting new pensions research initiative, managed independently on behalf of the entire UK pensions industry by a small group of master trusts and the pensions policy institute (PPI) who shares a common goal of wanting to contribute to a wider societal benefit where everyone has better provision and can achieve a positive outcome in retirement.
The crucial new facet, which does not currently exist anywhere else, is the ability to link across the various pension pots which individuals have with different providers, thus generating unprecedented levels of insight for both pension providers and Government.
About
BACKGROUND
The development of public pensions policy in Britain and overseas is increasingly being informed by evidence-based research. However, currently in the UK there is no central longitudinal research base of people’s total retirement savings. This exists in other countries (such as the USA) and is a powerful tool for evidencing how individual citizens’ retirement savings, aggregated across their different schemes and providers, are evolving over time.
Discussions about establishing such a research database for the UK have taken place for many years across Government and the pensions industry. The Pensions Commission identified this data deficiency for making evidence-based policy in their First Report in November 2004. More recently, discussions about addressing this need for evidence have been led by the Pensions Policy Institute (PPI).
THE PENSIONS DATA PROJECT is…
A data amalgamation project to get insight into people’s savings patterns. It is a central longitudinal research database of people’s total retirement savings.
Initially, it will aggregate across the Defined Contribution (DC) pots (trust and contract based) which individuals have with different providers, thus generating insights for both pension providers and Government.
In the longer term, there will be an opportunity to provide other industry-wide insights on the adequacy of individuals’ total retirement savings and their resulting incomes by linking to:
Defined Benefit (DB) scheme data
Decumulation data
Other data sets, such as the Annual Survey for Hours and Earnings (ASHE)
IMPORTANT because…
We don’t really know what is going on!
There is no single combined data set that shows us how people are saving for their retirement.
The ONS/others produce aggregate statistics and individual modelling, but we can’t answer questions like:
How many pension pots do people have?
How often do they move provider?
How much is their pension wealth?
How does this change over time?
The Project seeks to answer all of these questions and will be incredibly useful in building the evidence base to inform better policy making.
THE WHAT AND THE WHO
The Pensions Data Project will combine the DC pension pots of pseudonymised UK individuals.
Source data will be supplied from different pension schemes and providers, with a possible link up with other data e.g. ASHE, anticipated in the future.
The Project is being led by a small group who is committed to evidence-based policy making and further research into long-term savings: B&CE provider of The People’s Pension, Legal & General, Nest Insight on behalf of Nest, NOW: Pensions, the Pensions Policy Institute and Smart Pension.
Subject to agreement, providers will be the source of the first year’s data, with other automatic enrolment/DC and eventually DB providers following in later years.
HOW WILL IT WORK
The planned approach is for each provider to transmit pseudonymised data from their DC book to a trusted central repository. The individual records will be merged and aggregated. Poor / bad data will be identified and highlighted to the relevant provider. Analysis of the data will be undertaken subject to adherence to a data access policy.
Analysis of this combined dataset (by policymakers, academics & other research partners), will provide vital inputs to inform the long-term development of retirement saving (and wider) policy.
Some of the questions the dataset will be able to answer include, ‘How many pots with how many different providers?’ ‘How much across all the different pots?’ ‘How many of these pots are ‘small’, and how much does it cost to maintain all of these pots separately?’
The Pensions Data Project has different aims and serves a very different purpose to the Pensions Dashboard initiative: dashboards is a digital interface that will show one individual their lifetime pensions savings in one place (if they ask), whereas The Pensions Data Project will aggregate individuals’ pension pots and provide a greater understanding of the overall pensions landscape at an aggregate level which will inform policymakers about total DC saving at a societal level.
PROOF OF CONCEPT phase
Over the 2019 Summer, a Proof of Concept (PoC), using realistic, but entirely fictitious, DC pensions data from several unidentifiable providers explored the different technical options for a) pseudonymising/encrypting personal information (so that individuals aren’t identifiable), and b) combining the encrypted data. The exercise proved that the aims of the project can be achieved technically. Click here for more details.
NEXT STEPS - private beta phase
The Private Beta phase is underway and will use live provider data that will be analysed to answer specific research questions. Click here for more information.
HOW AND WHY TO BE INVOLVED
There are many benefits to be involved in this project from an early stage. We are looking for providers, funders and other interested parties to participate in developing the first cross-industry pensions dataset. Please register your interest by clicking on ‘contact’.