MICRA researchers report on later life and pension decisions
MICRA researchers have published an article in the Journal of Ageing Studies titled 'How do people think about later life when making workplace pension saving decisions?'
Hayley James co-authored the paper with Tine Buffel and former MICRA Director, Debbie Price. They investigate how people anticipate the future when they make decisions about workplace pensions, considering whether they think about later life at all; if so, how they conceptualise it; and how these views shape their saving behaviour.
The paper highlights the following points:
- The ways in which people think about the future (later life and retirement) are disconnected from their pension saving decision.
- Rather, people focus on what they can afford in the present, prioritising stability and standard of life in the present and foreseeable future before long-term saving.
- Later life was considered to be a distinct and uncertain phase in the long-term future, and thinking about it was uncomfortable. Most participants were unable to predict what retirement might be like for them.
- If those in the relatively advantaged sample did not connect pension saving to their long term futures, this disconnect may be amplified in less privileged and more precarious groups.
- What has previously been identified as an unconscious ‘present bias’ is instead a conscious and culturally constructed mechanism that embeds structural privileges into long-term savings.
Hayley told MICRA: "Pension saving is highly pertinent to the experiences of ageing since outcomes have a huge impact on how people will live in later life. This paper demonstrates that pension saving decisions are not directly connected to anticipation of the future. However, the focus on the present appears not to be an unconscious bias, as it is often portrayed, but a considered course of action in the face of uncertainties of later life. This challenges conventional thinking around individual engagement in pension saving within pensions industry and policy."