AI gains traction in UK pension communications

Employers are increasingly turning to artificial intelligence to reshape how they communicate with members of defined contribution pension schemes, according to new findings from the consultancy WTW.

The latest UK DC Pensions and Savings Survey, which polled 229 employers, found that 80% of employers believe AI will “fundamentally change” communications and engagement around retirement savings.

Almost half (48%) plan to investigate how different pension providers utilize AI over the next two years, with an additional 11% already taking steps in this direction. Contractual changes are also on the rise, as 46% of employers intend to introduce AI-related terms into future agreements with providers, while 7% have already done so.

From the employee side, more than half (51%) feel comfortable interacting with an AI-powered service for basic retirement questions, and 47% are open to receiving guidance tailored to their specific circumstances. However, a lower proportion of respondents (38%) expressed willingness to allow an AI system to make decisions on their behalf.

Robert Callard, a senior director in WTW’s financial planning business, said: “The biggest challenge facing DC pensions is helping members make informed decisions throughout their savings journey and into retirement. AI has the potential to make support more accessible, more personalised and available when people need it most. “Employees are broadly open to AI when it comes to receiving information and guidance. That creates an opportunity for employers and providers to rethink how they engage members. The key will be combining valuable human interactions with new technology, strong governance and human oversight so that trust is maintained.”

Regulatory and industry response

The Pensions Regulator has set up an advisory council to oversee how AI is affecting the pensions sector, and the Financial Conduct Authority is also working on regulation of AI use across the wider financial services industry.

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Meanwhile, the communications consultancy Quietroom has warned that many AI responses about specific pension schemes are misleading and often sourced from the websites of unrelated schemes. Technology company Penfold has urged pension schemes to identify how their providers use AI and ensure they have clear accountability for how the technology is governed and how member data is handled.

Separate research suggests a broader shift toward digital services among older members. Earlier this week, Aptia reported that older pension scheme members are growing increasingly reliant on digital services such as their provider’s website. Earlier this year, PensionBee cited data from the search marketing platform Semrush showing that traffic to the MoneyHelper website had fallen by 10% over six months. Over the same period, it reported a steady rise in Google’s “AI Overviews” generated from MoneyHelper’s content, indicating that savers are getting answers directly from search results rather than clicking through to the source material.