A BBC finance expert has warned that people are relying on artificial intelligence for pension advice, despite chatbots frequently providing incorrect answers. Iona Bain appeared on BBC Morning Live days after Prime Minister Andy Burnham set out plans to reform the state pension triple lock from 2030.
Ms Bain said that because the "state pension has been on lots of people's minds over the past week", many are turning to the internet for answers, but some are relying on AI "very understandably". While AI can be free and seem "authoritative", she stressed that it can "get a lot wrong" - including financial advice.
PensionBee research findings
She explained: "Recently, the pension provider, PensionBee, did some research. It asked four of the main chatbots out there pension questions and found that one in 10 answers could lead to people either losing money or making mistakes that they weren't able to undo."
"Another issue that was highlighted was that even when chatbots get stuff right, they sometimes leave out very important context. To give you an example, one answer that was given about combining old pension pots left out the fact that if you transfer a defined benefit pension worth more than £30,000, you're legally required to get regulated financial advice."
Almost 13 million people currently receive the state pension, with around 40 million having a private pension. The expert said that PensionBee's findings are "massive."
Expert advice on using AI
She continued: "We've had previous scandals with people who have ended up moving their money into poor investments or even scams and losing a lot of the really valuable benefits that come with final salary schemes."
"So I would say yes, AI can be useful sometimes. But please do not hang your hat on it. Go directly to trusted sources and get the answers that you're looking for."
Becky O'Connor, Head of Pensions at PensionBee, said: "An answer can contain correct information and still leave you with the wrong impression because something important is missing. This is one of the biggest risks with using AI for financial questions."
"Consumers need to look beyond whether an answer sounds right and check whether it gives them the full picture before acting. AI can be a great tool when used alongside trusted sources such as MoneyHelper, GOV.UK, HMRC or your pension provider."
What is the state pension?
The State Pension is a government payment, usually made every four weeks, to people who've reached State Pension age and have paid (or been credited with) enough National Insurance (NI) contributions. In general, you need 35 years of qualifying contributions to get a full state pension. The current age is just over 66, rising to 67.
Triple lock changes explained
The triple lock, introduced in 2010 by the Conservative-Liberal Democrat coalition government, ensures the state pension goes up each year in April in line with either inflation, wage increases, or 2.5% - whichever is the highest. Mr Burnham said he would honour the pledge given in Labour's 2024 manifesto to keep the triple lock unchanged in the current Parliament. However, from April 2030, the arrangement could change.
The state pension would then rise every year by at least inflation or by 2.5%. MSE's Martin Lewis notes that "the change is subtle", explaining "it's about loosening, not ending, one of the three locks – the link to average earnings."
The Gov.uk government website says: "From April 2030, the government will adjust the Triple Lock, increasing the value of the State Pension every year. This means it will continue to protect pensioners against price rises and ensure they benefit as the economy grows."
At his speech to the Labour Party conference, Burnham announced the triple lock plans. He said: "The state pension will continue to rise every year at least by prices or 2.5%. And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation. But this change will generate significant savings which we will use to build up our national care service."
Pensioners who currently receive a State Pension will continue to receive their Triple Lock pension until April 2030. After this date, people will receive the adjusted State Pension. The UK Government says that this will continue to rise every year and be protected against inflation.
