Artificial intelligence is poised to reshape the UK defined contribution (DC) pensions market, with employers increasingly looking to use the technology to improve member communications, engagement and retirement outcomes, according to a new WTW survey.

The UK DC Pensions and Savings Survey 2026 survey from the advisory and broking firm found that four in five employers (80%) believe AI will fundamentally change how retirement benefits are managed, communicated and delivered.

Employees are also broadly comfortable with AI providing retirement information and guidance, with 51% saying they would be comfortable using AI to answer basic retirement questions and 47% welcoming personalised AI-generated guidance. However, only 38% were positive about AI making decisions on their behalf.

Employers are beginning to assess the technology, although adoption remains at an early stage. Only 11% have evaluated pension providers’ AI capabilities, but a further 48% plan to or are considering doing so within the next two years.

Similarly, 7% have introduced AI requirements or restrictions into provider contracts, with another 46% planning or considering doing so.

Robert Callard, senior director in WTW’s Financial Planning business, said: “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. The key will be combining valuable human interactions with new technology, strong governance and human oversight so that trust is maintained.”

Meanwhile, average annual pension management charges have fallen from 0.41% in 2014 to 0.26% in 2026. WTW estimates that the reduction could increase retirement savings by around 3-4% for a typical member saving over 35 years. However, the consultancy said the focus should increasingly shift from reducing fees to assessing overall value, arguing that excessive pressure on charges could limit access to more diversified investments such as private markets and infrastructure.

Stuart Arnold, senior director in WTW’s Retirement business, said: “There is a growing recognition that the lowest cost does not always deliver the greatest overall value for members. 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?’”

Employers also continue to recognise a role in supporting financial wellbeing, with 35% wanting to take an active role and 58% a supporting role. However, only 32% now have an advanced financial wellbeing strategy, up from 22% in 2021.

Support is still concentrated on education, with 72% offering webinars and online sessions, compared with 25% providing financial advice, 22% one-to-one guidance and 21% workplace savings products.

The survey also points to greater employer focus on retirement outcomes, with 53% planning to assess the retirement incomes employees can expect over the next two years, compared with 28% that have already done so.

Arnold concluded: “The pensions industry has spent the last decade driving efficiency and reducing costs. The next decade is likely to be defined by how effectively it improves member decision making and outcomes.”

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