From paper to pixels, connecting to pension members in a digital world

The world wide web was invented in 1989. If you were 18 years old when that happened and the world first started moving online, you will now be in your 50s. If you started earning your living at that time, you will have been working for over thirty years; you may or may not have thought much about pensions before (even if you have accrued several during your career) but it’s highly likely that you will be doing so right now. And with over three decades of internet-mediated working and living behind you, a digital-first approach to getting things done will frame your expectations of any service provider.

Communication by post is past it

According to Age UK’s latest research, from 2009 to 2020 the proportion of UK adults over 50 who reported regularly using the internet rose from 41% to 88%. In the context of this generational shift in behaviour and expectations, the paper-based communications traditionally preferred by the pension industry are, well, nearing retirement.

Membership engagement by post is slow, expensive for the fund and the member and simply not very engaging. The postal service typically yields low response rates, and the annual statement has fallen out of step with the way the world communicates and takes action. And, while people typically won’t move house as often as they change jobs (and pensions) in their lifetime, the United Kingdom’s Royal Mail statistics indicate that about 10% of the population move every year, a fact that will undoubtedly have a negative impact on address data held by a pension scheme.

The UK pension industry is going digital, fast

So, the UK pension industry is playing catch-up on digital engagement, both in terms of member expectations, data and with the way the sector operates in the wider world. A ‘dashboard’ – a digital portal giving information on all a person’s pensions, including their state pension, online, securely and in one place – was launched by the Australian Tax Office in 2013. Sweden has had its MyPension dashboard since 2004.

Now, the digital revolution in pensions is arriving in the UK with compulsory onboarding to the ecosystem starting in 2023, pension dashboards look set to shake up the sector and member expectations. Recent research by the Association of British Insurers (ABI) confirms that dashboards are likely to be popular, if not interactive enough to meet younger age groups’ digital demands, with 2 in 3 working-age adults likely to use them. Based on the experience of dashboards internationally, pension schemes may receive up to 20,000 ‘find requests’ a day, or one every couple of seconds, once the system is operational. So, the industry needs to be ready.

“the digital revolution in pensions is arriving in the UK with compulsory onboarding to the ecosystem starting in 2023, pension dashboards look set to shake up the sector and member expectations.“

The partial-match problem about to hit pensions

The UK pension dashboards ecosystem will encompass dashboards operated by one of several registered providers – these could include banks, fintechs, pension schemes or insurers and data providers. These dashboards will be populated with pension information – information held by a pension provider, scheme or trust.

A matching member identity will be the key that unlocks that information and allows a provider or scheme to return a ‘found’ pension to the dashboard. The problem accelerating toward the UK pension industry at millions of megabytes per second is what to do in the likely event of a ‘partial’ or inconclusive member match. The traditional response of a paper-based industry reliant on bricks-and-mortar address data would be to trace and retrospectively reconnect with a ‘missing’ member by sending a confirmatory letter to a new address. In the age of digital pensions, however, that kind of response time just isn’t going to fly.