Whilst artificial intelligence (AI) is beginning to play an important role in pensions administration, its adoption by individual pension scheme members remains limited, according to the Trafalgar House Trust & Confidence Index.

It found that despite a growing awareness of AI-driven tools, most people were not yet using AI to support their retirement decisions.

When surveyed, only 8 per cent of the population reported using AI tools for pension planning.

Indeed, the “overwhelming” majority (82 per cent) indicated that they had never used AI for their pension planning needs.

Of those who had, general-purpose AI chat tools, such as ChatGPT, were the most used, with uptake at 9 per cent.

Specialised AI-driven pension tools, such as robo-advisors (2 per cent) and financial planning apps (4 per cent), have even lower adoption rates, while AI-powered pension provider platforms are also used by only 3 per cent of individuals.

Furthermore, 5 per cent of respondents who reported using AI for pensions were unsure how they had applied it, suggesting a lack of clear understanding or engagement with these tools.

Among those who had incorporated AI into their pension planning, the most common applications include calculating projected retirement income (15 per cent) and understanding pension rules and tax implications (14 per cent).

Other potential uses, such as exploring contribution increases (13 per cent), planning for early or delayed retirement (6 per cent), or comparing pension providers (8 per cent), had lower adoption rates.

Trafalgar House client director Daniel Taylor commented on the findings: “Last year’s survey showed the industry had a long way to go to engage schemes and members with a digital pensions journey, and this latest batch of results shows nothing has changed.

“AI is, however, making waves in pensions administration – driving efficiency in data analysis, coding, and customer service – all enabling providers to deliver more streamlined and cost-effective services to schemes, which is a very good thing,” he continued.

“For members, though, AI is barely a ripple. With 82 per cent yet to engage, the real question isn’t just how to bridge the gap but whether we should.

“For now, AI is quietly transforming admin, but with ongoing accuracy concerns about communication, caution is critical for member engagement. Trust and avoiding mistakes with members must remain top priorities until these issues are fully addressed,” added Taylor.

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