Last week in the Waracle 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. If you’re interested to know more about the latest mobile megatrends, it’s worth downloading this whitepaper!
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.
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. If you would like to learn more about other trends affecting mobile app development, download one of our free whitepapers on mobile trends and mobile marketing.
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!
If your company wants to find out about digitising your services, contact us today. At Waracle, we’ve a wealth of fintech experience having worked within the sector for many years covering mobile banking, credit card mobile apps, real estate, insurance, accounting and broader retail banking initiatives. We work across platforms and languages including iOS, Android and Hybrid HTML5 and provide single project support, onsite or offsite managed agile teams and optimisation.
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