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Fintech is shaping the pensions industry as it soars ahead in innovative products for savers. Open banking has opened it up for pension funds to access more information for savers and also helped savers get an overview of their money easier.
As we await the pensions dashboard, fintech saving apps are filling the gap and creating simpler alternative ways to save for retirement.
“It’s great to see the fresh ideas injected by new fintechs into the pension space, and it’s clearly encouraging the big players to continue to develop their offering and to think more like a fintech,” said retirement expert at Scottish Widows, Robert Cochran.
Almost nine in 10 eligible employees were participating in a workplace pension in 2020, according to the Office for National Statistics. Overall trends in participation have increased since automatic enrolment in 2012, but there are concerns around engagement.
Fintech apps may be the answer to helping with this. Here are four apps to look out for in 2022 that are shaping the way we save.
Smart Pension, is a master trust for businesses of any size. It has a platform designed to make it easy for members to access their account in real-time through the app or website. Smart also says it offers a sustainable pension that helps tackle climate change. It was one of the first master trusts to decide the majority of its default growth investment fund should be made up of sustainable funds.
Cushon is another tech-focused master trust. It also offers a range of ISAs. Their app is designed to put the user in control of what they’re saving, along with free service CushonMe, which
automatically reviews your investments 24/7. In January 2021, Cushon launched the 'world's first' net zero pension.
Plum is a savings and investment app. It has a personal finance assistant powered by AI to analyse spending habits by connecting to your current account and automatically saves money on your behalf. Plum does this by analysing transactions and identifying regular income, rent, bills and daily spend. It then calculates daily what amount it can safely put aside without affecting your daily life and moves it to your Plum account via direct debit every 4-5 days. Users can also select their own auto-saving rules.
Snoop uses open banking to analyse spending and suggest ways to save money across a number of areas of personal finance. It connects all of a user’s bank accounts and credit cards in one place to help show what they’re spending on which card. It also checks and notifies any overpayments on bills and purchases and creates a personalised list of ways to save money.
Cochran says the advent of pension dashboard and open finance creates the opportunity to “turbo boost” the trend set by fintechs: “It’s why we call this decade the Connected 20’s; by the end of the decade, today’s open finance dream should be a reality. With all your financial data displayed in one place and the possibility of a financial GPS to help you navigate the journey to retirement with the right products solutions for your different life stages.”
How will fintech apps like these impact on the pensions industry and on people’s saving habits?