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Understanding Default Behaviour in Workplace Pensions: Automatic Enrolment in the UK.

Published online by Cambridge University Press:  30 October 2019

LYNNE ROBERTSON-ROSE Open the ORCID record for LYNNE ROBERTSON-ROSE [Opens in a new window]
LYNNE ROBERTSON-ROSE*
Affiliation:
Social Policy, School of Social & Political Science, University of Edinburgh, 15a George Square, Edinburgh, EH8 9LD email: [email protected]
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Abstract

This article examines the retirement savings behaviour of twenty-five 30-40 years olds automatically enrolled into a workplace pension scheme. Using qualitative interviews, the paper explores the interaction between savings motivation and willingness to adhere to, or deviate from, the pension scheme defaults. Integrating insights from different savings paradigms, including sociological approaches and behavioural economics, the paper highlights how social motives drove willingness to accept enrolment defaults. Participants’ reactions to the contribution defaults were motivated by a complex combination of factors including anchoring effects, the salience of ageing, and emotional responses such as pride, uncertainty and loss aversion. The author’s main premise is that greater attention needs to be given to the interaction between subjective feelings about saving for retirement and pension scheme design.

Keywords

automatic enrolmentworkplace pensionsdefaultsanchoringemotional responses
Type
Article
Information
Journal of Social Policy , Volume 50 , Issue 1 , January 2021 , pp. 21 - 39
Copyright
© Cambridge University Press 2019

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