UK workplace pension holders want better digital tools to connect with their pensions and more effectively plan for retirement, but many providers are still relying on outdated technology and letters in the post, new research has found.
In the latest UK workplace pension member research by Bravura, the leading technology provider to the world’s fund and wealth industries, has released a new report entitled ‘Pensions 2045: The Voice of the Saver’ to examine how people are interacting with their pension and planning for retirement.
It found that three-quarters of UK workplace pension holders are not being effectively supported by technology from providers as predicted incomes needed to retire comfortably continue to surge amid the cost-of-living crisis. This poor adoption of technology is stifling engagement with pensions and standing in the way of better retirement outcomes.
The research revealed that 75% of the 2,000 respondents did not have access to retirement income estimators, savings calculators or retirement goal trackers. Savers named all three of these technologies as their preferred tools for retirement planning. In addition, nine in ten members did not have access to tax planning, social security benefits estimators or interactive scenario modelling tools (9%).
Looking ahead, half of respondents (49%) would engage more with their pension if it was accessible through their online banking account, with 85% preferring to access this information via a mobile app.
With the FCA’s Advice Guidance Boundary Review looking to lay out a proposed framework to supply affordable and scalable guidance solutions to members, 73% of respondents stated that they would use a digital advice service if it was offered through their pension providers.
In fact, the lack of digital advice is widely unpopular with respondents, with 72% stating that a lack of advice is a blocker to social mobility – a key goal of successive governments.
The vast majority (84%) believe that more people should have access to digital or financial advice to achieve better retirement outcomes. Members think providers have more of a responsibility for educating people about their pensions (55%), compared with anyone else – including the government’s Money Helper (49%), employers (46%) or schools (36%).
Bravura’s Proposition Lead EMEA, Jonathan Hawkins, said: “Our research shows there’s a clear opportunity for providers to take a more prominent role and deliver an outcome-based model to their members.
“It’s sad to see that most workplace members don’t have access to crucial retirement planning tools, given we’re well over a decade into the UK’s auto-enrolment journey. It, unfortunately, shows that we still have a long way to go to make our industry more competitive and focused on the needs of savers to encourage engagement.
“Dashboards will undoubtedly be an important step towards effectively modernising the UK’s pensions sector, and the industry needs to use this as a springboard to find its place in the open finance ecosystem and all the benefits it will bring to consumers.
“If you add to the mix Collective Defined Contribution (CDC) and potentially the Chancellor’s pensions mega schemes, many schemes, providers, TPAs and Master Trusts could quickly see their legacy business models go up in smoke without the appropriate investment in technology to create better member outcomes and lower costs to serve. No Provider, Master Trust, TPA or Scheme wants to be the pensions equivalent of “Blockbuster” when consumers want the pensions “Netflix”.”
