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Open finance a key solution as pension engagement remains ‘concerningly’ low

by Paul Morgan

The Role of Money Apps in Driving Stronger Pension Engagement

Industry experts are highlighting the potential of money apps to drive stronger engagement with pensions. Research from Moneyhub has revealed that a significant portion of savers fail to regularly check their pension, with 25% admitting to never checking and another 23% checking only once a year.

These findings reflect the historical lack of engagement that savers have had with their pensions. Many are only alerted to their pensions’ value once a year through the provider’s annual statement. This lack of engagement is more prevalent among individuals over the age of 55, with 40% admitting to never checking the value of their pension, and an additional 20% checking only once a year.

However, the research also highlights a change in behavior among younger savers. The ease of access through pension provider apps has resulted in more frequent checks, with 48% of 16-24-year-olds and 47% of 25-34-year-olds checking their workplace pension at least once a month.

Moneyhub emphasizes the role of technology in encouraging greater pension engagement. The upcoming pensions dashboards are seen as a potentially vital solution to address the lack of engagement and savings shortfall in the UK. These dashboards, with both government and commercial versions in development, aim to provide savers with a comprehensive view of all their pensions, including state, workplace, and personal pensions.

While the government dashboard is expected to enable savers to find and view their pensions, commercial pensions dashboards may go a step further. They could allow savers to connect to other financial products they use, enabling a holistic view of their finances. Moneyhub emphasizes the importance of considering finances as a whole and believes that open finance-powered solutions can help customers better understand their finances, develop lasting savings habits, switch to better products, and locate lost pensions.

Mark Horwood-James, the marketing director for personal finance technology at Moneyhub, commented on the findings, stating that consumers clearly want a better understanding of their pensions and the ability to regularly monitor their retirement income. He added that it is not enough to simply engage more with pensions; a holistic view of finances is required. Pensions dashboards, when combined with holistic money management tools, have the potential to be a game-changer for both the industry and its customers.

In line with these findings, Standard Life recently announced its partnership with Moneyhub to deliver a commercial pensions dashboard. The company plans to embed its white-label pensions dashboard into its existing customer app, further enhancing the accessibility and engagement with pensions.

In conclusion, the research from Moneyhub highlights the need for improved pension engagement among savers. Money apps, particularly pensions dashboards, supported by technology and holistic money management tools, can play a significant role in driving greater engagement and helping individuals make informed decisions about their pensions and future financial well-being.

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