Dashboards and other digital developments are set to transform the UK pension member experience over the next three years.
The UK pensions administration industry is increasingly moving pensions into the digital age, helping members to access the information they need online, expanding the options available for modelling their retirement benefits and extending the retirement journey so that members can ‘retire online’.
Administrators rated dashboards (37%) and digital (42%) as the two developments that will be most impactful for their industry over the next three years, in a WTW survey conducted at the Pensions Administration Standards Association (PASA) conference, which took place in April 2024.
Beyond dashboards and digital innovation, other plans are afoot. We asked administrators to choose which of the following options would most improve the member experience: shorter Service Level Agreements (SLAs); providing more customer self-service options; giving administrators more time to spend with customers; increased management of member expectations (whether through automated means, phone calls or other channels.).
Interestingly, the most popular answer was increased management of member expectations, with 52% of administrators saying this was their priority. Members are used to regular updates in other areas of their lives, whether from the courier delivering their parcel or the dentist when their next check-up is due. There is clearly a desire among administrators to help pension scheme members in a similar way. More self-service was the second-most popular option for 31% of administrators, again reflecting their desire to empower members.
At the other end of the spectrum, nobody thought that shorter SLAs would lead to an improved member experience. Shorter SLAs are a frequent focus and often seen as analogous to administrative excellence. However, quicker timeframes do not necessarily mean an administrator is doing their job well; they mean they are doing it quickly.
Indeed, administrators who are under pressure to meet short SLAs may end up giving members a less personal experience than those who take more time to talk to the member, understand what they need and answer their question while updating them throughout the process.
In this transformative time, it’s no surprise that administration providers are facing a capacity crunch. Everyone who participated in the survey believed the crunch is a very real issue, with administrators choosing to address it in a variety of ways.
Most saw improving their training programmes and empowering members to access more information via self-service as the way forward. Partnering with external suppliers was another popular solution, with offshoring not far behind.
There has been a lot of coverage in the industry about the possibility of introducing a default consolidator model to manage small DC pension pots. Given the pace of change in administration, it’s no surprise that most survey respondents felt that it would be prudent to hold off on plans to introduce this initiative. Almost half (44%) thought that the right time would be in two to five years, with a significant minority (33%) opting for over five years.
It’s clear from these survey results that scheme administrators are playing a pivotal role in transforming members’ experiences of pensions. Their role will remain important as pensions consolidation continues, dashboards make progress and digital innovations continue to transform how people interact with financial services.
