The UK is facing an ever-widening pension engagement gap. Indeed, research from My Pension Expert earlier this year found that almost half (46%) of UK adults over the age of 40 have not checked in on their pension savings within the previous year.
There could be several reasons for this – for example, some may find pension information too complicated to follow, or they might have lost track of their multiple pension investments. Others may simply think monitoring one or more pension pots is too much hassle.
That said, there could be a clear solution in the form of financial technology (fintech)…
The benefits of fintech
Incorporating fintech into retirement finance strategies could dramatically improve the way in which Britons engage with their pension.
First and foremost, it could simplify the process of tracking down lost pensions. At present, if people want to track down lost pension pots (such as workplace pensions from previous jobs), they must use the Government’s Pension Tracing Service. Whilst useful for finding pension providers, the service does not offer any additional information about a person’s pension – it is up to the user to contact their provider themselves.
To remedy this, the Government announced their plans for a Pension Dashboard, due to be launched in 2023, which promises to help Britons track down their various pots and view all their pension information in one convenient place. Such a tool will undoubtedly remove the effort of finding and managing multiple pots and investments.
Even if individual providers were to adopt technology to grant clients better access to their pension information, engagement could be enhanced. Indeed, recent research from My Pension Expert found that almost two fifths (39%) of UK adults receive information from their providers but rarely read it in detail. So, rather than waiting for information to be sent to clients in the form of complicated quarterly or annual updates, providers might consider developing new platforms which allow clients to view simplified breakdowns of their pension investments so that they can monitor their progress.
Evidently, technology has the potential to simplify pension management for many individuals. However, there appears to be hesitance amongst Britons to embrace such fintech. Indeed, six in ten (60%) of respondents to My Pension Expert’s aforementioned research would oppose their pension provider offering better technology to help them manage their retirement finances digitally.
The question, therefore, is what can be done to change the minds of savers?
Seeking advice
Of course, the Government, as well as providers and financial services regulatory bodies, should make information about the benefits of fintech readily accessible for consumers. However, savers must not underestimate the role of independent financial advisers in helping Britons to understand how technology could enhance their retirement finance management.
Indeed, our team of advisers at My Pension Expert are not only able to offer tailored financial advice to help clients achieve their desired retirement outcome, but they can also help them to better understand how fintech will enhance their financial management. For example, an adviser will be able to answer any questions someone may have regarding online pension management and offer practical advice regarding how they could incorporate it into their retirement finance management to maximise their pension pot.
New fintech developments may seem intimidating to some savers – particularly if they are not tech-savvy. However, provided that they have access to the right financial advice, it is likely that more and more people will soon become open to the idea of incorporating fintech into the management of their retirement finances. Doing so will certainly simplify many people’s pension management and help them to achieve their desired retirement outcome.