A] Prelude
For more information on pension systems, risk and coverage, feel free to visit our dedicated webpages:
https://expatpensionholland.nl/uk-expat-pensions
https://expatpensionholland.nl/global-pillars-systems
https://expatpensionholland.nl/global-investments-risks-0
https://expatpensionholland.nl/global-social-security-coverage
For even more information feel free to visit the following external sites:
https://retirement.fidelity.co.uk/tools-calculators-retirement-planning/
https://evolvemyretirement.com/
https://www.aviva.co.uk/retirement/tools/my-retirement-planner/
B] The Issue
Many pension providers are still relying on outdated technology, with nearly half (41%) still posting out letters, despite UK workplace pension savers wanting better digital tools to connect with their pensions, research from Bravura has revealed.
The survey also found that 75% of members don’t have access to retirement income estimators, savings calculators or retirement goal trackers, despite savers naming all three of these technologies as their preferred tools for retirement planning. In addition to this, just under one tenth (9%) of members did not have access to tax planning, social security benefits estimators or interactive scenario modelling tools.
C] Perception
This lack of digital solutions was “widely unpopular” with savers, according to the survey, as 72% said that a lack of advice is a blocker to social mobility – a key goal of successive governments. In addition to this, the vast majority (84%) believe that more people should have access to digital or financial advice to achieve better retirement outcomes.
In particular, 55% of members felt that providers have more of a responsibility for educating people about their pensions, while 49% were keen to see more being done through the government’s Money Helper, 46% thought employers had more responsibility, and 36% wanted schools to do more.
The research suggested that improvements in this area could also encourage greater engagement, as nearly half (49%) of pension savers said they 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.
In addition to this, 73% of respondents stated that they would use a digital advice service if it was offered through their pension providers.
D] Opportunity
Bravura proposition lead EMEA, Jonathan Hawkins, highlighted the research as demonstration of 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,” he continued.
“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.” In particular, Hawkns suggested that pensions dashboards will “undoubtedly” be an important step towards effectively modernising the UK’s pensions sector, arguing that 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.
E] Finally
“If you add to the mix collective defined contribution (CDC) and potentially the Chancellor’s pensions mega schemes, many schemes, providers, third-party administrators (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,” he continued.
“No provider, master trust, TPA or scheme wants to be the pensions equivalent of Blockbuster when consumers want the pensions “Netflix”.