The virtuous circle: value for all from pensions technology

Pensions Technology Survey 2018

Overview

Pensions technology has the potential to change the way we work, how we make choices, and how we achieve our long-term objectives – whether as pension scheme members, trustees, sponsors, advisers or even regulators and policymakers. Just as technology is transforming other industries, pensions technology can turn pensions on its head, with better decision making, closer collaboration and common platforms, advanced analytics, and smarter use of resources for all parties in the pensions landscape.

While some employers have begun to exploit the potential of this technology, many others have yet to be convinced. Our research, based on separate surveys of employers and employees, charts a very mixed picture.

Some employers are convinced there is a broad range of gains to be realised, but others have not made that leap; some employers think they are already providing excellent technology-enabled support to their workforces, but employees are often less convinced; equally, employees say they desperately need more help with effective pension planning, and see technology as providing attractive options.


 

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  • While 68% of employers claim to be taking steps to encourage earlier member engagement with their pensions, many are not providing basic technology to facilitate this
  • Only 39% of employers are aware of tools that could help their employees plan more effectively for retirement
  • Workers from younger generations are already more likely to view their pension savings online and now want much more sophisticated tools to manage their pensions
  • Significant numbers of pension schemes will invest in new pensions technology over the next three years

 

Key findings

Securing value for pension scheme members - Communication, engagement and planning

Pensions technology can be a key enabler of communication

The biggest short-term benefit from investment in pensions tools could be to improve member communication, where many employees receive ad-hoc levels of contact.

82% of employers see communication as a key area for investment, 43% of employees state that they're not even sure they receive an annual update from their scheme
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Pensions technology can drive member engagement

While employers claim to be taking steps to encourage earlier member engagement with their pensions, many are not providing basic technology to facilitate this.

68% of employers claim to be taking steps to encourage earlier member engagement with their pensions, 30% of employers do not provide online access, more than 1/3 of employees have never looked at their pension online
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Pensions technology can promote better planning

Employees lack confidence in their pension planning, but with only 34% prepared to pay a financial adviser for support, employers must step into the breach. However, only 39% of employers are aware of tools such as member outcome analysis that could help their employees plan more effectively for retirement.

only 34% of employees are prepared to pay a financiial adviser for support, only 39% of employers are aware of tools such as member outcome analysis
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Pensions through the generations

62% workers from younger generations would welcome new portals offering a single view of their wealth management
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New entrants to the workforce will drive demand for pensions technology

Workers from younger generations are already more likely to view their pension savings online and now want much more sophisticated tools to manage their pensions; 62% would welcome new portals offering a single view of their wealth management, with pension savings linked to other elements of their personal finances.

48% of millennials would use an automated pensions advice app vs 60% of generation Z workers, 53% of millennials would use an online pensions portal linked to their bank account vs 62% of Z workers
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The generational divide is stark

Younger generations are not engaged with pension planning and worry about how to become more engaged. Pensions technology provides the solution – 48% of millennials would use an automated pensions advice app, rising to 60% of generation Z workers; 53% of millennials would use an online pensions portal linked to their bank account, rising to 62% of Generation Z workers. These figures are several times higher than for older generations including traditionalists and baby boomers.

Securing value for pension scheme sponsors and trustees - Investment and benefits 

The pensions technology value case is becoming broader

While many tools will be member-facing, technology can also drive value for scheme sponsors and trustees, offering benefits such as greater cost-efficiency, access to de-risking analysis, enhanced cyber security and improved standards of governance.

The pensions technology value case is becoming broader
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Employers and trustees now plan significant pensions technology investment

Significant numbers of pension schemes will invest in new pensions technology over the next three years: for example, 61% expect to invest in tools that give members greater online access to their pensions.

61% of pension schemes expect to invest in tools that give members greater online access to their pensions
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Contact us

Steve Blackmore

Pensions Partner, PwC United Kingdom

Tel: +44 (0)7843 368782​​

Jeremy May

Pensions Leader, PwC United Kingdom

Tel: +44 (0)7976 708256

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