Better engagement should lead to better decision making and outcomes for pension scheme members, but low levels of engagement and understanding, particularly younger members, is a persistent issue for the pensions industry. Recent UK Government research found that attitudes to pensions were ‘characterised by detachment, fear and complacency’. Reducing feelings of fear and confusion in relation to individuals’ pensions is a first step towards improving outcomes.
Some UK schemes are already looking to embrace the metaverse as a potential tool to achieve this. The metaverse could help bring pensions to life, modelling how an individual’s choices might affect their standard of living in retirement. It could also offer individuals the ability to interact with information about their scheme’s investments, and potentially new ways to receive financial advice or guidance.
This is at an early stage, but it is clear that the benefits will come with legal risks. Some will be familiar territory, such as cyber security and data protection. Others are less clear: how far should agreements and decisions made in the metaverse, or financial advice given, carry across to the ‘real world’? What about jurisdictional considerations? The legal framework will need to develop quickly to keep pace.