Trust in AI for pension guidance improving but concerns remain

Artificial intelligence (AI) is ‘transforming’ the way people access financial support, with trust in using the technology for pension guidance improving, research from Scottish Widows has shown.

It found that 30 per cent of people trusted AI to give them guidance about their pension, with 80 per cent of these respondents trusting AI from their pension provider or financial advice firms.

One in five (20 per cent) said they would trust technology firms that did not specialise in money over any other provider, which Scottish Widows said highlighted the need for further education on how consumer protections differ.

Over two fifths (42 per cent) said they were comfortable using AI to explain pension jargon, while 37 per cent were happy using AI to calculate how much they need for retirement, and 28 per cent were open to using the technology to work out how much they need to save each month.

Scottish Widows noted that although AI was emerging as a useful tool for explaining financial products and helping people make retirement decisions, there was still demand for financial professionals for more complex choices.

Just one in 10 (10 per cent) retirees would be comfortable using AI to suggest the best way to withdraw from their pension pot, falling to 5 per cent among those aged 50 and older.

Nearly half (48 per cent) of people were worried AI could give wrong or unsuitable pension advice, 43 per cent were concerned about the safety of their data, and 38 per cent did not think it would take their personal circumstances into account.

However, AI was found to be playing a valuable role in helping people take their first step towards financial advice, with 31 per cent saying they would take AI-generated insights to a financial adviser and 24 per cent using AI information to have more informed discussions with their pension provider.

“AI has the power to simplify complicated financial topics, personalise guidance, and make everyday decisions around pensions, savings and investments much easier to manage,” commented Scottish Widows chief customer & digital officer, Maria Herrero-Bullich.

“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.”

This article originally appeared in our sister publication Pensions Age.

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