Defined contribution (DC) pension schemes have been being urged to better understand how their members are accessing their information, after analysis from LCP revealed that, on average, 7 per cent of users logged into their app each quarter over the past two years.

The analysis, which used seven metrics to measure member engagement, found that the percentage of online account users has remained static over the past two years, with around 16 per cent of master trust members regularly logging on to their online account.

However, there was a range of engagement seen across the industry, with the highest scoring master trust at 30 per cent and the lowest at 2 per cent.

Use of apps was lower, as the highest scoring master trust had 16 per cent of members regularly logging in to their app, while the lowest scoring saw just 3 per cent logging in.

In addition to this, LCP found that the average completion rate for nominated beneficiaries was “alarmingly low” at 15 per cent of the membership, which LCP highlighted as a lack of attention to this crucial aspect of pension planning.

However, LCP said whilst there are engagement challenges with the app, the nudge or email open rate is high at 46 per cent, with the highest scoring master trust achieving 66 per cent and the lowest getting 36 per cent.

This figure has been gradually improving, as LCP noted that the nudge or email open rate rose from 39 per cent in Q1 2022 to 53 per cent in Q4 2023, highlighting this upward trend as "encouraging".

In addition to this, it revealed that, despite member engagement levels remaining low, member interactions increased throughout 2023, ending the year at 10 per cent, suggesting a potential increase in member interest as new features appear.

LCP also argued that while the prevalence of low engagement levels remains a persistent challenge, it also presents an opportunity.

“By refining user experiences, promoting app usage, tailoring communications, actionable strategies can be deployed which should, pave the way for a more secure financial future for all," LCP principal, Rachel Crowther, said.

“It's time to crack the code and unleash the full potential of defined contributions pensions.”

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