the times | Saturday October 17 2020 1GM 61
Money
to share data in a standardised way, but
those that receive your information
have to be authorised.
The Financial Conduct Authority,
the City regulator, has to approve any
company that wants data from your
bank, with about 300 companies
licensed so far. These companies need
to obtain separate authorisations for
sharing data and for requesting data.
You have to give your explicit, opt-in
permission for your data to be analysed,
and it can only be held for a singlespecific purpose such as analysing your
transactions to produce personalised
reports. Consumers are protected by
the fact that whoever you give permis-
sion to access your data can do so for
only 90 days, then they have to opt in
again. The only way to give permission
for your banking data to be shared is by
logging on to your online banking.
Experts say that banks have tougher
identification checks than any other
services apart from ordering a passport
or identity document. In the future youcould in theory pay in a shop by giving
the name of your bank to the person at
the till and authorising the payment
through an open banking phone app.0 How far will data sharing go?
The idea of portable data — like a suit-
case of your personal information — is
powerful and means you could share
your details with the companies that
can be most useful to you. Facebook’s
chief executive, Mark Zuckerberg, has
called for data portability, so that
people can transfer their photos and
posts between social media platforms.0 Could it go too far?
Imran Gulamhuseinwala, trustee of the
Open Banking Implementation Entity,
said: “The fundamental reason we’re
doing this is that the data the financial
institution holds on the customer be-
longs to the customer, not the financial
institution. In a safe and secure way you
can access your transaction data and
use it in a way that benefits you, not
your bank or underwriters.”
The pension industry is trying to in-
troduce a dashboard so that people canWhich apps should you use?
6 Snoop works by
putting all your bank
accounts in one place
and trying to work out
where to save money.
6 Yolt and Money
Dashboard let you
track spending and pay
money into other bank
accounts from within
their phone apps.6 Credit Kudos lets you
prove to a lender that
you are creditworthy
even if you have a poor
credit score, because it
looks at all your
transactions from
recent months and
works out the
proportion of the time
you spend in the red.6 The digital debt
adviser Tully creates
a budget for you
after analysing all
your accounts.
6 Wagestream and
other salary advance
schemes predict when
you will next get your
salary and can lend you
the money in advance.see all their pension pots in one place
and the government wants to legislate
to expand data sharing across all sec-
tors through its National Data Strategy,
spearheaded by the political adviser
Dominic Cummings.
A consultation on widening Open
Banking to all financial industries,
dubbed Open Finance, closed at the
start of the month. This project would
allow companies to hold a giant pipe-
line of your data that would include
your current account, mortgage, cash
savings, Isas, investments, pension, in-
surance and energy provider. The bank-
ing trade body UK Finance said: “Open
banking is a world-leading innovation
with potential to make our financial
lives safer and more convenient.”
The plan is ambitious and consumers
will need reassuring that all their data
cannot simply be hacked in one go. But
it could mean that one company of your
choice could tell you that your phone
company’s terms and conditions are
changing or that you are missing out on
a better saving rate.
And it all started with a war veteran
doing laps of his garden.banking revolution
How to use open banking
1 Download an open banking mobile phone app
such as Yolt, Credit Kudos or Snoop2 Register your details and who you bank with. You
will be guided to log in to your bank accounts, and give
permission for the app to use your information, which
will allow it to display all your details in one place.3 The app will give you personalised recommendations
for saving money on things like phone bills or energy.4 From next year, your open banking app will allow you
to check out on shopping websites by redirecting you to
your bank account and taking the money automatically.5 Some organisations, such as Just Giving, have run
trials to allow you to donate directly from its payments
page, without having to log in to online banking.Savings gulf:
pension crisis
looms for the
self-employed
employed people earning more than
£500 a week saved into a pension,
compared with 70 per cent two decades
before.
Self-employed workers can set up
their own private pensions, but must
choose where to invest the money, and
they do not benefit from employer top-
ups. Employees earning £10,000 in a
single job, by contrast, will have a
pension set up for them into which they
pay five per cent of their qualifying
salary and get a minimum three per
cent top-up from their employer. It is
possible to opt out if they wish.
“It’s particularly concerning to see
huge declines in participation among
the more long-term and well-off self-
employed,” said Heidi Karjalainen, an
IFS economist.
“These are groups who will particu-
larly need to save privately for retire-
ment on top of the state pension to
avoid falls in their standard of living
when they stop work.”
The Pensions Regulator said that it
was focusing on helping younger
savers, born between 1980-2000, who
are more likely to need to rely on the
investment performance of their pen-
sion pot for a retirement income than
older generations.
Charles Counsell, the chief execu-
tive, said: “It is vital that as a regulator
we anticipate the change that’s coming.
We must focus on the security of these
savings, on the value they deliver, on
innovation in the marketplace and on
bold and effective regulation.”S
elf-employed workers are now less
likely to be saving into a pension
than they were in the 1990s.
Although the number of company
employees with retirement funds has
soared thanks to auto-enrolment, only
16 per cent of the UK’s 5 million self-
employed workers contributed to a
private pension in 2018. This is down
from 48 per cent in 1998, according to
the Institute for Fiscal Studies (IFS), a
think tank.
More than 80 per cent of working-
age employees now pay in to a company
pension, however, up from 42 per cent
in 2012
Over the past two decades the pro-
portion of self-employed workers who
are women has increased from 27 per
cent to 32 per cent.
However, the IFS said that changing
working patterns were not necessarily
behind the decline in self-employed
pension saving. Unusually, pension
saving dropped more steeply among
higher-earning self-employed workers.
In 2018, just 24 per cent of self-5 million
self-employed workers in the UK
JUSTIN TALLIS/GETTY IMAGESStoring up trouble
Source: IFS; ONS Family Resources Survey80%
60
40
20
0
1998 02 06 10 14 2018Employees
Self-employed
Pension membership