22 October 2018
Technological advances have the potential to unlock greater engagement on retirement savings, but scepticism abounds. How can we overcome trust issues to give savers another tool in their arsenal, asks Bob Scott, Senior Partner
Can you ever have a steady, measured revolution, or is that a contradiction in terms? I ask because, with the “tech revolution” upon us, we in the pensions industry should be thinking about what form it takes and how rapid the pace of change should be.
There is support for a Pensions Dashboard, but how fast should we be pushing forward with innovations like robo-advice and other forms of artificial intelligence (AI), or the development of new platforms like smartphone apps to help people save? And how much more work do we need to do for people to be convinced of the benefits? One way to find out is to listen to savers’ views, and shape our approach accordingly.
With this in mind, we commissioned an exclusive YouGov poll to find out just how well-developed consumer appetite is for some of these new concepts.
Trust issues must be addressed
It’s immediately clear that a huge amount of scepticism exists around robo-advice. Mention the idea of getting retirement planning and savings advice from a robot and most people are automatically on their guard – 57% of Brits we surveyed said they would not trust such guidance.
This doubt also has a lot to do with age; millennials generally indicate greater openness, so that almost half (45%) of respondents aged 18-24 were in favour of robo-advice, compared to less than a fifth (19%) of the 55+ age bracket.
While this age-related disparity is to be expected, our findings do demonstrate that demand is emerging, but that a more widespread promotional and educational campaign may be needed if savers are to embrace saving in this way. The majority of savers may not be ready for a robo-revolution just yet – but there could be a growth market there to be tapped.
Such steps will likely help, because we know from experience that those who seek advice and engage with savings are more likely to have good provision and to be more responsible with their savings approach.
Demand for the Dashboard
Our survey indicates that getting the Pensions Dashboard up and running is a more pressing concern. More than a fifth of those surveyed said they would be most encouraged to save more if they could access all their retirement savings information online via such a platform. Interestingly, support for the Dashboard is not age-dependent – we found similar levels of interest from all age groups.
This scale of demand comes at a critical time, as the Government has given the nod to an industry-led dashboard, as outlined in my previous blog.
Setting the pace of change: steady shouldn’t mean slow
Our findings suggest that if people are to fully engage with emerging technology, the revolution needs to happen in stages. Savers are not ready for a “big bang”.
A steady approach should make savers more comfortable with trusting technology, and the end-result will be that future pensioners have one more tool in their savings armoury.
About the survey
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2008 adults. Fieldwork was undertaken between 22nd - 23rd August 2018. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
- 45% of 18-24 year-olds favour robo-advice on retirement planning and savings, but only 19% of the 55+ age bracket would trust it
- Support for the Pensions Dashboard is just as high across all age groups, with 21% overall seeing it as the technology that would most encourage them to save for retirement
- 24% of 18-24 year-olds would be most encouraged to save for retirement with a smartphone app to make it easier to top up their pension – compared to just 4% of those aged 55+