In our "Retirement Planning: Same Challenges, Different Solutions" post, we discussed how pension funds in the UK and superannuation funds in Australia face many of the same challenges. One particular challenge lies in the generational considerations of the demographics participating in these funds. For example, as people live longer, they may find their accumulations at retirement are insufficient to reach the duration of their lives. Premature depletion, or accessing retirement funds earlier than expected, only exacerbates this problem. During the COVID-19 pandemic, Australia chose to allow participants to access superannuation funds to help ease personal financial burdens, completely emptying their funds in some cases. The UK did not allow similar access. Along similar lines, many retirees in the UK and Australia receive their pensions as a lump sum, but longevity-focused products like annuities (already common in the US) are gaining more popularity.
To help participants understand their retirement accumulations and prepare to use them wisely, thereby improving member outcomes, there is an increasing level of attention given to educating members in financial wellness—starting well before retirement age. In order to reach members through the channels they prefer, the UK and Australian markets are leveraging technology to provide a personalized experience.
Traditionally, the retirement market has been more reactive than proactive in regard to regulation. There is a significant opportunity here to create initiatives that could benefit both providers and participants alike, with the trend towards financial wellness solutions being just one example.
Learn more about the retirement markets in Australia and the UK, and how those markets use different approaches to addressing common challenges in our "Common Goals, Converging Paths: Retirement Solutions in the UK and Australia" whitepaper.
