Young workers want digital pension information
?Organisations are failing to provide accessible ways for employees to find information about their pensions, PwC has found
Unmet demand for technology-enabled information is particularly high among younger generations. The majority of Generation Z workers (those born after 1994) said they would use tools such as automated pensions advice apps (60%) and online pensions portals linked to their bank accounts (62%).
However, 30% of employers admit to not providing even basic online access for pension holders, according to the PwC's report The virtuous circle: value for all from pensions technology.
Thirty-nine per cent of employees said they do not have access to tools that provide online information about their workplace pension, a figure that corresponds with the 38% who say they have never viewed their pension online. Of those that do, only 19% say they look at their pension online at least once a month, compared with 88% who check their bank account at least this regularly.
The study found that eight out of 10 (84%) employers see pensions technology as a key area for investment, but fewer than half (39%) are aware of new tools. Just over a third (31%) of employers are using email to communicate with pension scheme members, while more than three-quarters (76%) rely on traditional mailouts.
Steve Blackmore, a pensions partner and lead of the Midlands pension practice at PwC, said that employers must do more to understand the different needs among their workforces.
“Nine out of 10 employers rely on a one-size-fits-all approach to communicating with pension scheme members even though different generations clearly want to engage with their pension information in different ways," he said.
"Younger generations are used to and expect a digital approach when it comes to engaging with their finances, but when it comes to pensions many employers are lagging behind."
He added: “Some organisations need to do more to understand the different requirements of each generation of their workforce, as younger employees see technology as a key enabler to more effective pension planning. New and younger recruits are only going to drive an even greater demand for this technology – generalised communications are not going to boost engagement.”
Pensions technology also presents benefits for scheme sponsors and trustees in terms of savings, access to de-risking analysis, enhanced cyber security and improved standards of governance, the report claimed. However, fewer than half (39%) of the leaders surveyed said they are aware of tools such as member outcome analysis.
Jeremy May, UK head of pensions at PwC, said that while technology had been embraced in other areas of work, pensions have largely been ignored.
“Electronic communication has become the norm in almost every other aspect of employee engagement, banking and retail, yet around seven in every 10 workers do not receive emailed updates about their pensions," he said.
“Employers recognise that better engagement is needed and embracing new technology and alternative forms of communication should now be viewed as a priority. Organisations are becoming increasingly aware of what is possible but many are still slipping further behind the curve.”
Martin Harris, head of advice at Wealth Wizards, added that the opportunity to capture younger employees' imaginations around pensions was an important one, given concerns over rates of saving among this group.
“The vast majority of employees are not putting enough into their pensions," he said. "The young are probably the least engaged as they see it as something a long way off, and are confused by the dry technical material often made available. But they have the most to gain if they get motivated to save more."
He added that it's not just younger employees who're interested in pensions technology: "It's not just the young that want this digitally. My mother-in-law is in her 70s and is never without her iPad,” he pointed out.
PwC surveyed more than 2,000 employees and nearly 100 senior business leaders for the report The virtuous circle: value for all from pensions technology.