Most people reach retirement without a clear plan for turning their pension savings into an income. That is not a criticism of savers. It is one of the most consistent findings in pensions research, and it sits at the heart of an important new study from the Pensions Policy Institute.
The PPI is the UK’s leading independent authority on pensions and retirement policy. Its new report, Designing Guided Retirement Solutions: Meeting Member Needs, examines the biggest change to retirement support in a decade. Under the Pension Schemes Act 2026, every occupational defined contribution scheme will be required to offer members a ready-made route from pension pot to retirement income. Master trusts are expected to comply from 2027, other schemes from 2028, and the consultation that will decide the detail is expected within months.
Why is this happening? Because the evidence says savers need it. The Money and Pensions Service estimates that 22.5 million UK adults do not feel they understand pensions well enough to make retirement decisions. Around 44 per cent of people say they want a guaranteed income for life, yet fewer than half of them recognise an annuity as a way of achieving it, and only around 9 per cent of pension pots accessed for the first time are used to buy one. People are making some of the biggest financial decisions of their lives with the least understanding.
The PPI’s central insight is that Guided Retirement is not really a product. It is a pathway that members will travel for twenty or thirty years. Schemes will group members into broad segments using the limited data they hold, guide them towards an appropriate income approach, and stay alongside them as health, household circumstances and spending needs change. Every step of that journey is, in practice, a communication. The report puts it plainly: “Communications are therefore imperative.”
It is equally plain about what does not work. Wake-up packs, the letters sent to savers from age 50 to explain their retirement options, “often appear to have limited impact”. Many members do not recall receiving them. Among those who do, a significant share take no action at all. The report concludes that “simply adding more information to the current model is unlikely to deliver materially better outcomes.”
That sentence deserves a moment’s reflection, because it describes thirty years of industry habit. We have measured communication by delivery. Sent the pack. Published the document. Disclosed the risks. Whether anyone understood was assumed, hoped for, and never evidenced.
Guided Retirement raises the stakes on that habit. The report sets out three ways a “default” might work in practice, ranging from a recommended pathway through to automatic placement for members who never engage. All three depend on the same thing: the member understanding what is happening to their savings, what stays flexible, and where the exits are. The stronger the default, the more that understanding matters, because the report is clear that trustee-led and automatic models raise real questions of liability and redress. A scheme may one day be asked to show that a member placed into a solution genuinely understood it. Proof of postage will not answer that question. Evidence of understanding will.
Here is the encouraging part. The gap between sending and understanding can be closed, because members tell us so, and the data shows it.
Our own research at FCX Technologies found that 76 per cent of people report difficulties understanding pension communications. When the same information is built around the individual, their pot, their age, their options, and presented as an interactive experience rather than a static document, measured understanding rises sharply. Across our studies and client results, increases in consumer understanding range from 44 to 88 per cent compared with paper and traditional video, and around 70 per cent of viewers say they are likely to take the next step after watching. One member put it better than any statistic: “It was first class. I really can’t fault it at all. It was so easy to understand. I go away now knowing everything that I need to know, so yes, I would rather receive this than anything else.”
This is the thinking behind Video Canvas from FCX Technologies: a personalised, interactive video experience for every member, built from the data a scheme already holds, with a recap that lets members confirm their understanding and gives the scheme evidence of it. Unlike cloud-based video solutions, Video Canvas runs entirely within our customers' infrastructure. We are not a data controller or a data processor, and member data never leaves our customers' environment. Over 1 million pension holders in the UK already have access to Video Canvas experiences.
The PPI is independent and does not make policy recommendations, so the conclusions here are ours. Guided Retirement gives the industry a rare second chance at the communication problem. Schemes that treat member understanding as the outcome to design for, and to measure, will not just be ready for whatever the regulations eventually require. They will be the ones whose members enter retirement knowing what their savings are doing for them, and why.
That, more than any product feature or policy detail, is what good looks like.
"Great video content is so engaging for members, especially when it is deeply personalised to them. We chose to partner with Video Canvas, not just for great tech, but for their creativity and their strong focus on security."
Chris Connelly
Chief Strategy Officer
