Artificial intelligence (AI) is transforming the way people access financial support, according to data from Scottish Widows’ latest Retirement Report.
With over 26 million UK adults* lacking confidence when managing their savings for retirement, more are now turning to AI to better understand their pension savings.
Over two in five (42%) people are comfortable using AI to explain pension jargon, 37% would be open to calculating how much they need for retirement with AI and more than one in four (28%) to work out how much they need to save each month.
Growing trust in regulated AI tools
Trust is a huge factor when using AI for money decisions. Crucially, FCA-regulated AI tools come with formal consumer protections, which provide a safety net if things don’t go as planned. Unregulated or general-purpose AI tools don’t offer this protection – if they give inaccurate or unsuitable advice that leads to financial loss, people may be left without any support.
Almost a third (30%) of people currently trust AI tools to give them guidance about their pension. Of these, 80% say their most trusted source is either their pension provider, or firms that already provide financial guidance or advice. Meanwhile, one in five (20%) say they would trust technology firms that don’t specialise in money more than any other provider, highlighting the need for further education on how consumer protections differ.
The human touch still matters for big decisions
The findings also reveal that while AI is a useful tool for demystifying financial products and helping people make decisions about their retirement options, there’s still a strong desire to speak to a financial professional for more complex decisions when the stakes are higher.
For example, just one in 10 (10%) retirees would be comfortable with AI suggesting the best way to withdraw from their pension. Among those aged 50 and over, just 5% plan to rely on AI tools before taking money from their pot.
Almost half (48%) of people are worried that AI may give wrong or unsuitable pension advice, 43% worry about the safety of their data and two in five (38%) don’t think it would take their personal circumstances into account.
But AI has a valuable role to play in helping people take their first step towards financial advice, with nearly a third (31%) saying they would take AI-generated insights to a professional financial adviser and a quarter (24%) using AI information to have more informed conversations with their pension provider.
Maria Herrero-Bullich, Scottish Widows’ Chief Customer & Digital Officer, said: “AI has the power to simplify complicated financial topics, personalise guidance, and make everyday decisions around pensions, savings and investments much easier to manage. As it becomes a normal part of managing our money, trust is essential. It’s clear that for those bigger, more complex moments people still value speaking to a financial expert, so the human factor and AI can comfortably co-exist to provide people with the confidence to make more informed decisions about their future.
“One thing that’s important to understand is the difference between support from regulated firms and general-purpose AI tools, with the former carrying much greater protection for the consumer.
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