We all know that AI development is occurring at a rapid pace. According to Statistica.com, the four big tech giants (Microsoft, Alphabet, Meta and Amazon) are set to invest up to £725 billion in AI during 2026 alone¹. AI adoption has, and continues, to accelerate.
It seems inevitable, with this amount being spent on development, that the way we work will irreversibly change. With that, traditional employment and pension structures may need to evolve in response. Over this series of articles, we will speculatively explore what this could mean for retirement savings of the future, including the impact on employers, employees, and retirement savings governance.
How AI could change the way we work
We expect AI to have the greatest impact on roles built around design-based, routine or repetitive tasks, however, that does not mean humans will become redundant. The human element will remain essential, but predictions say the nature of work is likely to move away from routine tasks towards projects requiring oversight, coordination, and judgement. This is not all negative; it is simply a shift of skills, with the positive likelihood that a plethora of new jobs and roles are created with this shift.
Alongside this, the idea of a ‘job for life’ has been fading for some time, with people moving between employers more and seeking greater flexibility in how they work. This trend began well before AI, driven by broader changes in the modern economy. It is likely that AI will accelerate this, further normalising part‑time work, project‑based roles, and portfolio careers.
What this could mean for employers and employees
Reshaped hiring trends could see individuals holding multiple roles simultaneously and working across several employers rather than building a linear career with one. For employees, this potentially means more volatile career paths, less predictable income patterns and, crucially, less certainty around pension or retirement provision – unless a solution is in place to cater for this new way of working.
For employers, the implications are significant too. Rather than being the primary architect of an employee's retirement savings, a business might find itself just one of several contributors into an individual's pension - a notable departure from how workplace pensions have traditionally operated.
One certainty we have is that individuals will continue to retire and retirement savings will remain a key part of the employee benefit package.
What pensions of the future could look like
Considering all of the above, how might individuals continuously put away funds for their retirement? Firstly, there is likely to be a fundamentally different kind of retirement savings product required - one that is in equal measures portable and flexible enough to accept contributions from multiple sources across a person’s working life. This suggests there will be a shift towards retirement savings plans being designed more around the individual, as opposed to specific jobs or employers.
One idea is that multi-pot, multi-contributor scheme may emerge to reflect career fluidity and address the aforementioned uncertainty around pension provision from a single employer. Boal & Co is currently the trustee of a number of ‘Master Trust’ schemes which enable this on a basic level. The future equivalent could essentially be a more complex version of this considering multi-jurisdictional employment as well.
For example, individuals may have segregated digital sub-accounts with contributions being received from many sources in a continuous and automated manner. Portability could result in the form of a ’Pension ID’ which would enable numerous employers to contribute to a particular Pension ID when individuals perform work for them, starting and stopping contributions automatically.
In this way, the current mechanisms of auto-enrolment (a system used in the UK and some other countries wherein eligible employees are automatically enrolled into workplace plans) morph into something more resembling ‘auto-routing’ into your existing Pension ID.
Trust and incentive will be just as important as flexibility. Consequently, any solution (whether the idea outlined above or otherwise) will need strong government backing and robust regulation in order to command confidence, along with continued tax efficiency to make saving genuinely attractive.
With governments likely to continue encouraging private retirement saving to ensure financial independence it seems reasonable to assume that government backing for the ‘right’ retirement savings plan will be par for the course. Furthermore, it seems likely that trusts will remain useful, as j countries such as the UK and the Isle of Man place heavy reliance on trust law to solve the core problem of ringfencing assets with fiduciary oversight.
Pensions governance in an AI world
A previous article by Willis Towers Watson² highlights the risk of superficial innovation versus meaningful enhancement in an ‘AI pensions industry.’ They argue, whilst AI has the potential to improve member experiences, risk management and governance, these benefits will only be realised if human judgement remains central to decision‑making. This is absolutely true and reinforces the importance of trustee oversight in any future pension model.
Regardless of how technology reshapes administration or investment processes, governance structures that combine strong regulation with informed, human challenge will remain essential - both to satisfy regulators and to ensure decisions continue to be made in members’ long‑term interests, rather than being fully delegated to automated systems. We will explore this topic further in our next article in this series.
Looking to the future
It is unlikely that AI will radically reinvent pensions overnight. However, it is likely to accelerate changes that have been taking shape for some time. As careers become less linear and work more fragmented, retirement savings plans may need to gradually shift away from employer‑centric models towards more portable, individual‑focused arrangements.
At the same time, greater use of technology does not automatically imply less human involvement. If anything, the growing complexity of retirement and pensions saving may place even more emphasis on trust, governance and informed judgement, with AI acting as an enabler rather than a decision‑maker.
DISCLAIMER: This article explores potential implications of increased AI adoption in the pensions industry. It is provided for general information and discussion purposes only and does not constitute financial advice. The scenarios and views outlined are speculative and should not be relied upon when making decisions about pensions or investments. You should always seek advice tailored to your circumstances from a qualified, independent financial adviser.
¹ https://www.statista.com/chart/35046/capital-expenditure-of-meta-alphabet-amazon-and-microsoft/?srsltid=AfmBOooHe8HASNUumKg3BmE5PNvhDpomvWU-3wl9EWsVP0vXTQJtUyrs
² https://www.wtwco.com/en-gb/insights/2024/02/artificial-intelligence-and-pensions-fomo-or-foom
Conor Boal
Client Relations
