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Pensions - if only there was an app for that!

Last week in the office, someone asked me if I was happy with the contribution I’m making to my pension. To be honest, I was embarrassed to say I’d little idea what I’m contributing, especially having just received my annual statement in the post.

Here lies the problem. The paper statement (over several pages) and accompanying brochures got put away in a file in a cupboard…to look at later.  Which, let’s face it, really means, out of sight, out of mind. But, I don’t think I’m alone in being guilty of paying very little attention to my pension.  In the UK, people typically have very little interaction with their pension which means they are not fully in control of their retirement.

Modern workers don’t want paper statements

Our pension conversation in the office made me think…why don’t I show much interest in my pension? Why don’t I feel I have control over my retirement? After all, it’s just another form of savings. I login to mobile banking several times a month and I feel in control of my spending and savings.  Why don’t I dig out the online details for my pension scheme? I think there’s online access but there definitely isn’t a mobile app.

Pensions are an area of financial services that have been, until recently, mainly bypassed by the digital transformation which is currently happening across all other areas of financial services such as mobile banking. Just look at the features of Clydesdale Bank B App which brings together a current and savings account into one amazing personal finance app.  I use my mobile to check my current account balance, transfer money, make payments etc but when it comes to saving for my pension I’m stuck in a paper-based world.

Don’t get me started on how complicated it was to transfer old pensions into one new one…let’s just say I’d a lot of trips to the postbox and spent days waiting for mail!

Pensions need apps!

People are embracing digital technology in every aspect of their lives, from online banking to online shopping to uber taxis to tracking their steps with wearables and there’s no reason why they shouldn’t be tracking their pension in the same way – maybe we’d all pay more attention if it was easier.

What’s the difference between receiving a push notification telling you to take another few hundred steps to meet your step goal and one telling you to save an extra hundred pounds into your pension? Gamification, like fitbit uses, might even motivate people to save for their retirement.

To be honest, I pay more attention to my fitbit app notifications and spend more time trying to improve my fitness than I do looking at the health of my pension! Which is all very well, and might, hopefully, mean I can enjoy my retirement for longer, but how much will I receive in my pension? I actually don’t know. Can you honestly say you know how much is in your retirement fund?

Being part of a generation which carries out most financial transactions online, mainly via mobile, traditional paper-based statements don’t stand much chance of getting my attention.

In the UK, we’re facing a big challenge – the majority of people are not saving enough for the future, living longer and potentially also living with illness longer.  People don’t think about their pension until they approach their fifties – by which point it’s hard to catch up.

The annual Scottish Widows Retirement Report Adequate Savings Index provides a barometer of UK retirement savings levels. The findings are quite revealing. According to this report, there’s a clear lack of awareness among young people about how much they should be saving to achieve the income they expect to need in retirement. At current savings levels, Scottish Widows estimate people will be £8k short each year.  This is one of those figures we all hear, but in reality it’s another £150 per week on top of a pension that is likely to be considerably less than the salaries we receive today.

Why digitise pensions?

Just think, with a digital pension, accessed from a mobile app, people would be continually alerted to their pension shortfall and be prompted to take action.  People could even save daily to their pension e.g. if they don’t buy a coffee on their commute to work, they could, with a tap on their phone, save that money into their pension.  No more paper-based administration which can often take days, or weeks, to conclude. The visibility of seeing the pension app would be a continual reminder that it’s there. Much better than that letter sitting out of sight in your drawer!

UK needs to catch up

Compared to Estonia, Australia and some other technologically advanced countries, the UK has been slow to digitise pensions and needs to catch up.  Some pension providers are starting to invest in digital transformation to develop mobile apps and other online tools for digital pensions.

For example, Scottish Widows is reported to have invested £80m in digital innovation. They’re applying the same technology that makes day to day banking easier on mobile to help pensions to catch up.

Zurich life planner, makes it easy for people to adjust their savings and know how much to put away to meet retirement needs.

PensionBee – an app which combines all your old pensions into one new online plan. I certainly wish I’d known about that one! Likewise, Nutmeg promotes the easy access and benefits of being able to see your pension value and how it’s performing – whenever you want.

Changing mindsets

There is a challenge in the pension space for providers though. There’s a definite stigma associated with pensions and one which might be hard to overcome.  You can’t imagine many people showing off their pension app over a coffee! However, people will share their fitbit stats or proudly pay with their Monzo card.

Online banking and mobile banking have both dramatically changed the way people think about and engage with their money and their bank accounts. A similar change in behaviour needs to take place over time to change the current mindsets about saving for a pension and retirement.

There are so many reasons why pensions need to undergo a digital transformation. And that’s not only to engage younger savers and make the retirement industry seem less boring for the young workforce!  The auto enrolment of savers into new workplace pensions means the younger generation should be more interested and aware from the onset and the digitisation of pensions should maintain that interest.

Transformation of the pensions landscape

So, what’s the answer for me? How can I become as engaged with my pension as I am with my fitbit? It’s going to take a transformation of the pensions landscape, that’s for sure. Perhaps if my pension provider launches an app, the next time you see me, I’ll be boasting about my additional pension contributions and then you’ll be wishing I was still talking about winning the workweek fitbit challenge! Meanwhile, I’m going home to try and find that last annual pension statement and figure out what I need to do to improve my retirement prospects!




Comments: (5)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 April, 2018, 15:19Be the first to give this comment the thumbs up 0 likes

Doubt if a mobile app would matter much - a banker in Canary Wharf once told me she'd be destitute if she depended on her pension:)

Jokes apart, when I was in UK, mobile apps were still new. But, every month, my payslip would display the monthly pension contribution and cumulative pension balance to date. I did find that useful to keep a track of my pension, at least once a month. Instead of telling me to eschew that $5.00 coffee and put it away in pension, I like Acorn PFM's approach better: For every $5.00 coffee you buy - or any other extravagant expense you incur - the app threatens to put away some money in another account, which can be configured for pension. So, whether you control your spendthrift behavior or not, you'll have more money in your pension account!

A Finextra member
A Finextra member 05 April, 2018, 16:06Be the first to give this comment the thumbs up 0 likes

I'm not sure if £5 here or there will make a significant improvement in your pension. It seems a bit gimmicky. 

Also, if I had an app that I showed me my total pension pot, I'd be tempted to use it daily...and that then incurs the risk of me doing something stupid when the markets fall in a short space of time.


Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 April, 2018, 16:16Be the first to give this comment the thumbs up 0 likes

If not £5, then £100? Will that make a difference? Or has it gone too far down the tube to matter, as the aforementioned banker hinted to me - that was before GFC struck and stock prices nosedived. 

How do you use pension daily - I thought pension can be accessed only after retirement?

A Finextra member
A Finextra member 05 April, 2018, 16:45Be the first to give this comment the thumbs up 0 likes

Sorry - I meant use the app daily. I'm already doing that with my S&S ISA app. I need a "Show total funds no more than monthly" setting.

£100 would make a difference....and in the current market, buy in the dips then HODL. :)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 April, 2018, 18:54Be the first to give this comment the thumbs up 0 likes

Ah, so there's already an app for that! My paper payslip showed me the figure once a month "by default" and your app doesn't have that setting. One more reason why I like the "omnichannel" approach - paper sometimes, app some other times:)

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