Choice guidance for pension: are online tools alone enough?

“Online tools facilitate choices but do not help participants to oversee the consequences”

Offering choice guidance through an online tool is seen as a promising way to provide personalised support to large groups of pension participants. However, it is not yet clear if online tools lead to participants making the same retirement choices as they would with a pension advisor and whether participants understand the financial consequences of choices made using online guidance. We investigated the sufficiency of online tools by comparing participants who went through an online tool independently, in a group session or in a 1-on-1 conversation with a financial advisor.

Figure: Percentage of participants who indicated they felt (very) knowledgeable or agreed (strongly) with the statement
“Before the survey, I was aware of the choices I can make around retirement date” (N = 98)


Key Takeaways for the Industry

  • Online tools can help participants to actively think about their pension choices, but the effectiveness of these tools should not be overestimated.
  • Participants who complete an online tool independently overestimate their own expertise more often and understand the financial consequences of their choices less well.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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