University of Essex expertise is helping transform the pensions industry
More than 15 million Britons are not saving adequately for retirement and almost half of all UK adults have under £500 set aside to handle unexpected expenses. Maji wanted to develop a pioneering app that would help customers meet their retirement savings ambitions, help employers have happier employees, help pension providers make better products, and help the state spend less on delivering pension services.
Maji is a purpose-led company tackling the UK pension savings crisis by helping people to understand the value of their pension and to save into it at recommended levels.
On approaching EIRA, Maji had built a simple financial planning tool to help people create a plan to save for retirement. However, in order to facilitate and encourage a user experience that would help them to realise their financial goals, academic expertise from the University of Essex was enlisted to design and build a financial modelling engine in response to user’s requests.
This tool had to meet the needs of the wider market by integrating the services of pension providers, educators and financial planning providers to meet all of a customer’s pension needs in one accessible app based platform.
The Challenge
The pensions industry is not delivering value for consumers. In the UK, over 80% of people are not saving enough for their retirement and 1 in 5 has lost track of a pension, worth on average £13k. The number of under-savers is set to grow to 20m by 2026, with other western nations facing similar levels of under-saving.
In the UK, this savings gap contributes to employers losing up to £51B per year in lost productivity and absenteeism due to money worries, costs pension providers £200M in missed revenues, and the government £6.2B in subsidies for those in retirement who have not saved enough.
Maji wanted to tackle this problem by creating a financial planning tool which employers can license to empower their staff to take control of their own futures. The business was awarded an EIRA Innovation Voucher to collaborate with the University of Essex to help design and build a financial modelling engine as requested by users, that would meet the needs of the wider market inclusive of post-retirees.
The Approach
Dr. Spyridon Vrontos is a Senior Lecturer in Actuarial Science in the Department of Mathematical Sciences at the University of Essex. Dr. Vrontos is an expert in actuarial modelling and in actuarial and financial data science. His consultancy work includes valuation of employee benefits and pension funds – all of which made him uniquely aligned with the needs of this project. Dr. Vrontos worked closely with Sahil Sethi – Maji’s CEO – to understand the modelling engine’s and end user’s requirements to ensure the system developed was fit for purpose. It also had to generate varied economic scenarios and consider relationships between a broad range of asset classes.
This would help Maji’s product to create an app which enables users to create small steps to saving more, driven by better financial education about how pensions work, create clear savings plans for achieving a healthy retirement income, and tools to encourage automatic savings will lead to big changes that, over time, can solve a potential retirement savings crisis.
The Outcome
This project has resulted in the development of a clickable prototype that operates through accessing a high volume of code that was also created through this collaboration. This significant library of code allows users to model their financial goals, stress test against different scenarios and generate their financial plan
The prototype has been extensively tested with users who ranged from 21 years of age to 65 years of age with highly positive feedback.
Sahil Sethi, Maji CEO commented:
“The business has benefited immensely due to the project even though the product is not yet live. The prototype has been receiving excellent feedback from the user test group and the business has brought 2 new distribution partners onboard who were really impressed with the prototype.”
Dr. Spyridon Vrontos, Senior Lecturer in Actuarial Science said:
“I have enjoyed working with Sahil and Maji at each and every stage of the development of the financial planning tool. I really think it will be very helpful and will provide guidance and insights for a variety of people, irrespectively of their age, sex, wealth status, financial literacy and computational ability.”
Emma Wakeling, EIRA Knowledge Exchange Manager said:
“The project has progressed really smoothly; an excellent relationship has been forged between company and academic. They hope to continue development activity going forwards and we are investigating potential funding sources.”
Next Steps
The project team are looking into future collaborations to develop the prototype into a fully functional product which will be enhanced over the next 12 months. Their aim is to build an AI model that can predict actions that people can take to maximise their chances of achieving their financial plan.
This activity will specifically convert the prototype into a full fidelity design, and then merge the library of code with the designed screens to create a fully functional financial planner.
Contact for any queries
Sahil Sethi, Maji CEO
