Pensions are changing – and that’s a good thing

Digital innovation and pension reforms are driving engagement with workplace pensions. 

One thing is certain: 2025 is a busy year on the pensions front, with an explosion in the level of pensions engagement, and wide-ranging pension consultations and reforms pointing the way to a new future. 

I’m excited by growth in registration and member activity in our Scottish Widows app. With the imminent arrival of the government pension dashboard giving people a view of all their pensions, including their State Pension projection, we are potentially changing how people feel about their pensions, for ever.  

They’ll be able to see how much they’ve got saved, in seconds – and that is fantastic. Employers will need to be ready for a surge in members’ interest in their pension and as a provider we are preparing for a whole range of different questions from members about their wider pensions’ footprint. (Our November Scottish Widows podcast with pension dashboards expert Richard Smith explains how pension dashboards have worked in other countries, and I’d highly recommend a listen.) 

Scale reforms 

The government, meanwhile, is pressing on with a range of reform ideas including its desire for ‘megafunds’ of £25-50bn AUA by the end of this decade. As we have gone through our own growth journey to be the second largest pension provider in the UK market, we can see the increasing benefits of scale.  

Our investment default fund is the longest running and largest in the market and this enables us to make sure pension savers benefit from scale and value. We are evolving this, and can see exciting ways to use our scale to support members who want to invest a portion of their pension assets in productive finance to help grow the UK economy – and we’re aligning our investment plans this year with this in mind. 

Explosion in engagement 

It’s now halfway through the ‘Connected 20s’, the digital decade in which people are connecting not just their pension but their whole financial position, and the next five years will continue to be game changing on the pensions front. By investing in our business and technology infrastructure – including our new, single platform in 2023 – this has helped us deliver scalable, digital-first platforms, and a market-leading offering.  

With over £105bn AuA, and backed by Lloyds Banking Group, we’ve got the scale to keep investing and innovating and support an explosion in pensions engagement. 

Digital innovation is at the heart of improving engagement, with this being a key step to getting people on track for better retirement. We can see that in how our app use has really taken off, with transactions up 300% and app users doubling in 2023-2024, though there’s scope for more. 

We’ve invested in our app which is highly rated by users (4.6 on Apple and 4.5 on Android, Feb 2025) who can manage their pension in a secure, easy-to-use digital environment. They’re logging in more frequently so that they know what they have, what they might need, and how they can save a bit more.  

They can quickly name their pension beneficiaries, update their details, and consider combining multiple pensions, if it’s right for them. Pension consolidation that used to take weeks and a lot of paperwork, now takes minutes to set up.  

We added open finance directly into our app in 2024, with £1bn assets in other products from other providers linked up. We put experience design at the centre of how we do this in the app and we’re developing ideas to integrate dashboards in future.  Ahead of the government pension dashboard going live for everyone, we can see that many members are already using that open finance technology to build their own ‘dashboards’ from other pension providers, as well as their wider finances such as bank accounts and savings to get a picture of their overall wealth. 

Next up is scaling innovation in AI and gamification, and it’s already made a huge impact. Our award-winning Pension Mirror has been used hundreds of thousands of times since launch in 2023, at an average of more than 50k a month, and our new games in the app are changing how we help people get to the know their money. There’s no denying these are proving a brilliant way to get people excited about pensions – yes, really! 

We’re on a mission to disrupt things so that more people can look forward to a comfortable retirement. Our 2024 Retirement Report showed fewer than four in ten people (38%) are on track for that. Improving pension adequacy is firmly in our sights, as is the government’s. 

And that’s what makes what we do so worthwhile. Watch this space for more.