Pension schemes urged to use AI responsibly
A new Pensions UK analysis urges pension providers to integrate artificial intelligence (AI) carefully, given that savers are now relying on unregulated AI platforms for retirement-related financial advice. The study, 2030 Ready: a Pathway to AI Adoption, examines how AI is transforming the sector’s environment.
Pension schemes use AI for administration, investment, and member engagement, creating opportunities for more accessible and efficient pensions. However, the report highlights risks such as inaccurate AI outputs, cyber threats, and data privacy concerns.
The report warns that unless schemes adopt AI quickly, savers may turn to unregulated tools, exposing them to inaccurate guidance and data misuse. Pensions UK calls for proactive AI adoption with strong governance and human oversight.
Government and employers should monitor AI’s impact on workers, particularly older workers and under-pensioned groups. Zoe Alexander, Pensions UK executive director, notes that while AI supports schemes, it also poses risks, and savers are already using publicly available AI tools for retirement planning.
Alexander emphasizes that inaccurate information from these tools could have serious consequences. She stresses the need for trustees, schemes, and regulators to work together to adopt AI in a trusted and well-governed manner, focusing on better outcomes for savers.
Pensions UK is developing an AI guidance tool for trustees and schemes with The Pensions Regulator’s pensions data and digital industry working group. This resource will provide guidance on AI use in pensions and be updated to reflect developments in technology, regulation, and industry practice.
