Artificial intelligence (AI) tools are fast becoming a go-to for financial questions. For younger savers, it’s often the first place they turn for money advice.
A recent report found that around two-thirds of young adults in the UK now use AI for financial guidance - more than those who ask banks or professional advisers. It marks a major shift in how the next generation is learning to manage their money.
While AI can explain complex topics in seconds, it can’t always replace human understanding. And when it comes to long-term planning, like pensions, a little caution goes a long way.
Why AI feels so useful
Many younger people say they like AI because it’s fast, easy to access and free. You can ask almost anything, anytime, and get an instant answer written in plain English.
AI can also help simplify complicated financial terms, making concepts like tax relief or compound interest feel less intimidating. This could be especially helpful for those who’ve never studied finance or spoken to a financial adviser before.
And with financial confidence slowly improving in the UK, it’s easy to see why curiosity around new tools is growing. Nearly half of adults now feel more confident about their finances than they did a year ago.
However, confidence doesn’t always mean understanding, and some people still find it difficult to make long-term financial decisions on their own.
What AI can and can’t do
AI can be a useful starting point for learning about finance. It can explain how pensions work, what Auto-Enrolment means, or how investment growth happens over time.
But there are clear limits. AI doesn’t know your circumstances, so it can’t consider your income, debts, health or family plans. Instead, it may rely on general data that’s not specific to you or up to date.
When it comes to regulated areas like pensions, these details really matter. For example:
pension rules change regularly, and not every AI tool reflects the latest updates;
tax rates and allowances differ depending on your earnings; and
decisions like transferring a pension or taking money early can have long-term consequences.
That’s why it’s always best to double-check anything AI suggests with a trusted source or your pension provider.
The regulatory gap
If you’re using AI to learn about money, it’s worth knowing that these tools aren’t regulated by the Financial Conduct Authority (FCA).
AI platforms like ChatGPT aren’t authorised to give financial advice in the UK. This means that if something goes wrong - whether it’s outdated information, a calculation error, or advice that doesn’t match your circumstances - you won’t have the same protections that apply to regulated firms.
When you receive advice from an FCA-authorised company, you’re covered by important safeguards. These include the Consumer Duty, access to the Financial Ombudsman Service, and compensation up to £85,000 through the Financial Services Compensation Scheme (FSCS). You also benefit from professional standards and accountability.
AI tools sit outside this framework entirely. In its April 2024 AI Update, the FCA said it’s taking a “principles-based and outcomes-focused” approach to AI - but this currently applies only to regulated firms that use AI, not to the chatbots themselves.
According to the FCA’s Financial Lives Survey 2024, only 9% of UK consumers received regulated financial advice in the past year. Meanwhile, 19% of investors - especially younger ones - used social media for investment research. This shows that more people are turning to unregulated sources for guidance on important money matters.
As AI becomes more common in financial conversations, understanding where regulation begins and ends can help savers use these tools wisely.
What this means for pension confidence
Often, the hardest part isn’t starting a pension - it’s knowing how much to save and whether you’re on track.
AI tools can help here by showing examples, scenarios and projections. They can also help people imagine what retirement might cost and how small increases in contributions could build up over time.
AI can make learning about money simpler, but real confidence grows from knowing how your pension works and what it means for your future.
Engaging with your pension regularly can make a big difference. Here are three tools to help you get started.
Use our Pension Calculator - see how long your pension could last and how adjusting your contributions might change your savings.
Explore the PensionBee Academy - watch clear, practical videos that explain how pensions work and build your confidence step-by-step.
Discover Pensions Explained - learn the pension basics and explore simple guides for retirement planning at any age.
If you’re looking for more personalised guidance, it may help to speak to your pension provider or consider seeking advice from an Independent Financial Advisor (IFA).
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
