[SPONSORED ARTICLE]
What are the challenges facing DC savers today?
The biggest hurdle in DC isn’t participation, it’s adequacy — which is impacting outcomes. Longer lives and rising living costs are adding to this problem, meaning pensions now have to stretch further.
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Many people feel overwhelmed by the decisions they need to make at retirement. But there’s also a mis-placed optimism too — the belief that things will work out even when retirement savings are way off track.
This savings challenge can be worse for women, those on lower income and those from certain ethnic groups. As a result a one-size-fits-all approach is not going to adequately address these problems.
The industry has focused on education to close this savings gap, but more information has not translated into meaningful behavioural change. The focus has to now shift to helping people move from good intentions into action — giving them the confidence to plan a more secure retirement.
How can technology support members to make better decisions around retirement?
A lot of people know they should think about retirement — the issue is getting them to take action. Lots of people disengage because retirement planning is too complicated, too far away to matter, or too uncomfortable: not having enough money to live on can be a scary prospect.
That’s where behavioural insight comes in: understanding what prompts someone to take the next small step.
Technology allows providers to apply that insight at scale. By combining data with behavioural cues, smart pension tools can anticipate the support people need at a particular time. By personalising the savings journey, and breaking big decisions into more manageable actions, people are more likely to take action. These technology nudges can help retirement planning feel more ‘doable’ and so improve outcomes.
What are the latest tools and innovations L&G offers to its DC savers?
L&G has been investing in technology that joins up member data, behavioural insight and real-time signals. The aim is to create a consistent, connected experience — not isolated tools.
We’ve used this approach through our personalised communications, app and Guided Retirement Planner, which provides a more holistic view of members’ finances. Alongside the L&G pension this can include wider savings and investments and housing wealth — helping people build and test a retirement plan, step by step.
As the system learns more about the member, the guidance becomes more tailored, with nudges, modelling tools and signposts to face-to-face support when needed.
What have you learned from how members are using this technology?
The shift towards behaviour-led design is having a clear effect. Engagement with personalised content is more than 40 per cent higher than generic messaging, and this trend is particularly high among younger members.
This engagement is leading to concrete action: personalised prompts have led to an 85 per cent increase in members nominating beneficiaries — an important but often overlooked action.
The guided retirement planner is also making a real difference. Those using the planner are 50 per cent less likely to face a projected income shortfall. Overall one in three users have created a full retirement strategy, with one in five taking a tangible action, such as consolidating pots or changing contributions.
These changes suggest growing confidence and more informed, proactive decision-making.
What’s next for technology in DC?
In future members can expect more responsive digital experiences from pension providers, and smarter nudges as systems learn from wider financial behaviour.
Stronger data will support AI-assisted tools that can respond in real time to member needs. L&G plans to launch an AI virtual assistant next year to guide members from questions to action. This doesn’t mean people will be stranded in a digital world, as this assistant will offer access to face-to-face support when needed.
The FCA’s new Targeted Support framework will also allow schemes to offer more tailored help and suitable product recommendations, without crossing into full advice. We have been early contributors to this work and see it as a positive step for members and employers.
Technology won’t replace advice, but it will make confident, well-supported decisions far more accessible.
