Financial Decision Making in the United Kingdom: Changing saving behaviours with light-touch interventions

Student thesis: Doctoral ThesisDoctor of Philosophy


The extent to which people save for retirement is a key component in determining wellbeing in later life and, in the UK, policy makers have been concerned at the low level of retirement saving. In 2012, this led to the introduction of automatic enrolment into defined contribution pensions for all eligible employees with an aim of boosting illiquid retirement saving. Despite its success, the tendency to remain at the default minimum contribution rate means that, for many, the risk of not achieving saving adequacy in retirement is considerable. Therefore, the need to encourage people to save more has been widely acknowledged.

This thesis consists of five studies all of which look at whether different light-touch interventions could be effective at increasing pension saving rates among employees in the UK. The first study examines the role of a questionnaire that boosts future self-relevance to determine whether it improves the efficacy of primes to increase retirement saving. The second study looks at future self-relevance and the emotional intensity of vignettes to explore whether these are effective at improving retirement saving contribution levels. The third study looks at whether the phenomenon of inaction inertia - which decreases uptake of saving now because opportunities were missed in the past - is likely to exist
in the UK retirement saving context; and, how state-action orientation and regulatory mode mindsets may affect the propensity to save. In the fourth study, a quasi-experiment using a large data set from the National Employment Savings Trust was conducted to investigate whether the Freedom and Choice legislation introduced in 2015 decreased the rate of opt out amongst the over 55s (given the new cash access options provided the opportunity for employees to receive employer matches and tax relief without losing the liquidity of their money). Finally, in a field study, I looked at the broader notion of financial capability (the building blocks for financial decision making) to see whether a text-message intervention providing useful resources and financial tips was effective at improving the financial capability of widening participation students in English higher education institutions.

The primary contribution of this thesis is that it provides evidence on the efficacy of several theoretically-grounded and easily scalable approaches to `nudge' retirement saving (and financial capability in the case of the final study), that could be implemented at a very low-cost and without personalisation. A consideration of the value of replication and the importance of validity for the self-report measures used to explore many psychological concepts is also contributed to within this thesis. Together the findings in this thesis point to the likelihood that light-touch interventions alone will not solve the pension saving `crisis'.
Date of Award1 Jun 2023
Original languageEnglish
Awarding Institution
  • King's College London
SupervisorMichael Sanders (Supervisor) & Brian Salter (Supervisor)

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