Artificial intelligence is poised to reshape the UK defined contribution (DC) pensions market as employers and staff become comfortable with its use, according to research from WTW.
Employers are increasingly viewing the technology as a key tool to improve member communications, engagement and retirement outcomes, the firm’s latest UK DC Pensions and Savings Survey found.
Four in five of 229 employers questioned by WTW (80%) believe AI will ‘fundamentally change’ the way retirement benefits are managed, communicated and delivered.
Employees appear broadly comfortable with AI playing a role in providing information and guidance on retirement planning.
More than half of employees questioned (51%) would be comfortable with AI answering basic retirement questions, while almost half (47%) welcome AI-generated guidance tailored to their personal circumstances.
Support falls when it comes to AI making decisions on behalf of members though, with only 38% expressing a positive view on it.
WTW said the findings suggest the pensions industry could be ‘approaching a significant shift’ in how members access information and support.
Robert Callard, 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.”
