Mercer: Is AI the game changer for pension engagement?

[SPONSORED CONTENT]

Getting people to engage with their pensions has long been a challenge. Traditionally, pensions have been met with detachment, fear, and complacency¹, barriers that have kept many members at arm’s length. But AI is changing that.

Today over 70% of UK adults say they have used generative AI tools². In reality, that figure could be much higher, as AI is increasingly built into apps and services we already trust and rely on. Finance is the second most popular query on ChatGPT³, with over 28 million UK adults using AI to help manage their finances and 39% using it for longer-term financial planning, including pensions⁴. Could AI finally be the answer to the pension engagement problem?

Engagement is just the starting point

AI certainly makes pensions easier to engage with, but engagement alone doesn’t guarantee good decisions. General-purpose AI tools can quickly provide confident-sounding answers, creating a sense of trust. However, these tools aren’t built around UK pension rules and lack the protections that regulated services offer. Without proper safeguards, this misplaced trust can put members’ long-term savings at risk.

When a chatbot delivers an instant answer, it’s natural for people to accept it rather than dig deeper or challenge assumptions.  This isn’t a failure of judgement; it’s a natural human response to reduced friction. When something feels simple and confident, people are more likely to move on rather than pause and interrogate it⁵. But in pensions, where decisions have lasting consequences, there’s a real danger that AI-generated guidance is taken as definitive, even when it’s incomplete or, at worst, inaccurate.

Convenience can be risky

If engagement is driven by convenience rather than suitability, activity can increase without improving understanding⁶ or, importantly, outcomes.

Matt Gosden, Head of AI, Mercer Master Trust explains, “Engagement on its own is not enough. Trust, accessibility, and long-term outcomes are the real test of AI in pensions. Education is key, empowering customers to critically evaluate and recognise credible sources is essential.”

Building guardrails that support good decisions

To ensure AI supports informed decision-making, guardrails are essential. These can include:

• Anchoring curated and expert-reviewed AI responses to scheme-specific content and UK pension rules and regulation.
• Ongoing validation against real member questions and outcomes.
• Regular updates to prevent outdated or ‘drifting’ content.
• Clear escalation processes to maintain trust and provide timely human support.
• Strict data use, retention, and sharing policies.
• Protection against inappropriate data reuse.
• Real-time automated checks for vulnerability, confusion, disagreement, and scope creep within the live conversation.

This is the approach the Mercer Master Trust is taking when developing its pension guidance AI assistant. 

“We prioritised the basics: providing answers that are accurate, scheme-specific, and based on expert content,” continues Gosden. “Members receive tailored guidance aligned with Mercer Master Trust’s rules, not generic AI responses.

“Testing is equally rigorous. The AI tool has been evaluated against hundreds of pension questions, with experts reviewing for accuracy and clarity. Specialists also test its security and resilience, while continuous monitoring ensures quality and prevents errors.” 

AI has already begun shaping expectations, as Mercer’s recent paper ‘AI consumer expectations and pensions’ show. As an industry we cannot afford to let engagement continue to outpace safeguards. Engagement is a valuable predictor of member interaction, but it must serve the higher objective: helping members make informed, and safe, pension decisions. Guardrails are the safeguards that ensure AI-enabled engagement translates into good outcomes.

To read more articles from Mercer visit the content hub on Corporate Adviser – here.

____________________________________________________________________

^{1 Understanding member engagement with workplace pensions – GOV.UK
2 AI Skills for Life and Work: General Public Survey Findings – GOV.UK
3 Trust, tech, and targeted support – Quietroom
4 Over 28 million adults now using AI tools to help manage their money – Lloyds Banking Group plc
5 What Is Automation Bias and How Can You Avoid It? – ScienceInsights
6 Experts warn AI is making your brain work less – BBC News}