Making pension planning relevant to young adults

How might we make pension participation more relevant to young adults while providing responsible, personalised financial guidance?

Inform

Making pension value relevant earlier

In 2021, the Netherlands ranked second in the Global Pension Index after years at the top. However, high life expectancy meant pensions needed to support people for longer, while the share of young people making pension contributions gradually declined. The pension fund needed to give young adults a clearer reason to engage. Research indicated that connecting pension planning to a major financial decision, such as buying a home, could make its value relevant much earlier in life.

Analyse

Connecting today’s finances to the future

With the account holder’s consent, PSD2 made it possible to access financial information through secure payment APIs. We used transaction data to build personal financial profiles that combined spending behaviour with income and employment information. The model then predicted how someone’s income could develop until retirement age and calculated the maximum amount they could responsibly access from their pension to help finance a major purchase, such as a home.

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Making a long-term pension useful today

The result was a personalised financial model that showed young adults how their pension could support an important financial goal earlier in life. By turning transaction data and income forecasts into an individual recommendation, the pension became more concrete and relevant. Participation among young adults was estimated to increase by 32%, while overdue loan rates were reported to decrease by 197%.