Workplace pensions – the tech-enabled accumulation, retention and decumulation drivers

Workplace pensions have historically operated on a timeline measured in decades, while the rest of the capital markets and investment sector operates in milliseconds. For a long time, this disconnect was accepted as the nature of the industry. However, the gap between the user experience of a neo-bank or crypto trading platform versus a legacy pension provider has widened to a point where it is no longer just an inconvenience, but also a risk to engagement, understanding, and ultimately, member outcomes.

Throughout our partnerships with organisations like The People’s Pension, Standard Life, Royal London and Aegon, we have seen that closing the gap requires more than a modern interface. Digital excellence is no longer just about accumulation, it now involves retention throughout the customer lifecycle through to the point of decumulation.

We’re moving from a transactional model to a relational one. Here’s how product thinking and technology can bridge the gap between keeping assets and serving members.

Compliance as an experience catalyst

The pensions market is currently navigating a period of intense regulatory change. The risks around ‘Advice vs. Guidance’ have previously paralysed innovation, however, initiatives such as the Pensions Dashboard, Targeted Support, Disclosure Flexibility, and the Value for Money (VFM) Framework represent a huge opportunity to redesign the member relationship.

The industry has arguably lagged behind the wider financial services sector in terms of digital maturity. These regulations are the forcing function intended to address that.

Turning transparency into trust

The Pensions Dashboard is the first step towards true open finance in the retirement space and for the first time, members will see their fragmented pots in one view. If the data is messy, or the projected outcomes are unclear, trust will instantly erode.

Experience opportunities:

• Owning the customer experience: Providers who can offer the most intuitive dashboard experience will become the primary interface for the member, even if that member holds assets elsewhere.
• Personalised nudges: With Targeted Support regulations loosening the constraints around advice versus guidance, there is scope for context-driven AI agents to offer timely nudges. Prompting a member to review their contribution levels when they receive a pay rise, or explaining inflation impacts in plain English.

Technology enablers:

• Data platforms: A robust data layer is non-negotiable. It must be capable of ingesting and normalising data from legacy systems to feed the dashboard APIs in real-time.
• Context-driven AI: Moving beyond static FAQs to logic-based systems that can interpret a member’s specific context and surface relevant disclosure information only when it’s needed.

The decumulation paradox

Perhaps the most critical oversight in the current market is the industry’s heavy focus on accumulation. We have spent years optimising the journey for saving, yet the experience for post-retirement life (decumulation) often remains trapped in paper forms and complex processes.

Many providers have deprioritised decumulation for rational reasons: it involves high regulatory risk, complex individual tax needs, and the technical difficulty of transitioning from passive, mass-market accumulation to active, drawdown-focused income. For a business model predicated on Asset Under Management (AUM) percentage fees, building slick journeys to help customers withdraw funds can feel counter-intuitive.

We are currently witnessing a demographic tipping point. The cohort now shifting from accumulation to decumulation has high, digital-native expectations and they are used to managing their current accounts and investments via apps on their mobile. If a provider forces them into an analogue process, or provides insufficient guidance due to fear of the regulatory boundary, they will simply transfer their assets to a competitor or disruptor who makes it easy.

The risk of disengagement

If the friction between pre and post retirement journeys are too high, members can cash out entirely, exposing themselves to tax inefficiencies and poor long-term outcomes. Digital excellence here means providing the tools to visualise the future.

Experience opportunities:

• Enhanced scenario planning: Tools that allow users to toggle variables such as retirement age and withdrawal amount, and see the impact on longevity.
• Flexible decumulation: Building journeys that accommodate hybrid retirements, where a member might take part of their pension as tax-free cash, keeping some invested in lower-risk, steady-yield products, secure smaller annuities, or draw down a pension while continuing to work part-time.

Technology enablers:

• API-driven services: Flexible backend architectures that allow for seamless consolidation of pots and rapid execution of withdrawal requests.
• Dedicated mobile capacity: Decumulation is not a desktop-only activity. It requires a mobile-first approach that offers security and clarity on the go.

Designing for a multi-generational workforce

The ‘average member’ is a myth and the mass market approach is failing. The working patterns, affordability constraints and communication preferences of Gen Z differ from those of Gen X.

• Gen X: Mostly prioritising consolidation and visibility as retirement approaches.
• Gen Z & Alpha: Face the gig economy, disjointed employment histories, a high barrier to entry for savings.

What constitutes an appropriate baseline for one demographic is alienation for another. A static product strategy that treats all members the same is a resilience risk. To maintain profitability over the medium term and keep members engaged, providers must build flexibility into their core systems.

Experience opportunities:

• Hyper-personalisation: Moving away from generic pensions awareness campaigns to specific, data-triggered interventions.
• Responsiveness: Recognising that a pause in contributions from a gig worker isn’t a lapse in discipline, but a feature of their employment model, and adapting the communication tone to reflect that.
• IFA facilitation: Designing journeys that seamlessly integrate regulated advisors into the experience. The provider experience should support the broader advice ecosystem by enabling smooth data sharing, collaborative modelling, clear hand-offs and visibility across parties.

Technology enablers:

• Experimentation engines: The ability to A/B test different user journeys and communication styles across different cohorts is essential.
• Synthetic personas: Using AI to simulate how different demographics interact with the platform, allowing product teams to stress-test designs before deployment.

Data readiness as the foundation of AI utility

The conversation around AI in pensions is changing. We are moving past the hype cycle of generative AI experiments and Proofs of Concept (POCs) towards tangible, value-driving applications. However, AI is only as good as the data it sits upon.

For many providers, data is locked in siloed legacy systems, inconsistent in format, or riddled with historical errors. Data readiness is the prerequisite for capitalising on new technologies.

The goal is to augment, not replace, human service. AI can handle the heavy lifting of process automation and initial triage, freeing up human agents to deal with complex, emotional cases.

Technology enablers:

• Data hygiene and governance: Automated pipelines that continuously clean and validate data.
• Reporting platforms: Unified dashboards that give product leaders visibility into member behaviour, enabling data-led decision-making rather than intuition-led guesses.

The holistic approach to service design

The UK pensions market is consolidating and as smaller schemes merge and larger providers acquire books of business, the operational complexity increases. To capture the value of this vertical integration, firms must take a holistic service design approach.

If a member changes their address in the app, but a manual process is required to update the record in the administration system, the digital veneer is thin and eventually, that friction manifests as cost and error.

Our work across the industry has highlighted that process scalability is critical. An intelligent approach to automation, cutting across experience, people, and technology, minimises waste and ensures that technology investments deliver a return on investment.

The trust metric

Ultimately, the measure of digital excellence in workplace pensions is not the number of features released, but the level of trust established.

In an industry dealing with people’s long-term financial security, trust is the currency and it is earned through transparency and the reliability to deliver the right outcome at the right time. 

The technology is ready and the regulations are pushing in the right direction. The next step is to design the service with the member’s outcome as the true north!