Four in five employers with defined contribution (DC) pension schemes expect artificial intelligence (AI) to transform how retirement benefits are managed, communicated and delivered, according to WTW’s DC Pensions and Savings survey.

The research revealed that while employers expect significant change, more than half (51 per cent) of employees would be comfortable with AI answering basic retirement questions, and 47 per cent would welcome personalised AI-generated guidance.

However, only 38 per cent of employees would support AI making decisions on their behalf.

The study also found that while only 11 per cent of employers had evaluated pension providers’ AI capabilities, 48 per cent are planning or considering assessments within the next two years.

Likewise, 7 per cent of employers have introduced AI requirements or restrictions into provider contracts, while 46 per cent plan or are considering this step.

WTW senior director, financial planning, Robert Callard, said: “The biggest challenge facing DC pensions is helping members make informed decisions throughout their savings journey and into retirement. AI has the potential to make support more accessible, more personalised and available when people need it most.

“Employees are broadly open to AI when it comes to receiving information and guidance. That creates an opportunity for employers and providers to rethink how they engage members. The key will be combining valuable human interactions with new technology, strong governance and human oversight so that trust is maintained."

Continuing a trend identified in WTW’s 2025 survey, this year's study found annual management charges had fallen from 0.41 per cent in 2014 to 0.26 per cent in 2026.

WTW estimated that lower charges over the past decade could increase retirement savings by 3-4 per cent for a typical member over a 35 year period.

However, it warned that further reductions in charges could ultimately reduce benefits by limiting access to more diversified asset classes, such as private markets and infrastructure, which can strengthen long-term returns and provide investment and risk diversification but typically cost more to access.

Commenting on the findings, WTW senior director in the retirement business, Stuart Arnold, said the industry should be proud of the progress it has made on charges.

“Members today benefit from some of the lowest-cost pension arrangements we've seen. But there is a growing recognition that the lowest cost does not always deliver the greatest overall value for members," he continued.

"The debate is gradually shifting from ‘Where can the lowest fees be found?' to 'What’s the best investment mix to deliver the strongest retirement income?' This is a more meaningful conversation for employers and members alike."

Elsewhere, the research found that while almost all employers believe they have a role in supporting financial wellbeing, progress has been slow, with the share reporting an advanced strategy rising from 22 per cent in 2021 to 32 per cent in 2026.

The study also showed that employers’ focus on retirement outcomes is growing, with 53 per cent planning to assess the retirement incomes employees can expect over the next two years, compared with 28 per cent that have already done so.

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