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How we save for retirement

This research project has been completed. Please contact a team member for further information.

Funded by leading pensions company, Prudential, and in partnership with the Strategic Society Centre think-tank, ISER is conducting its second analysis of our saving habits for retirement.

The findings of Who saves for retirement: Wave 2 Understanding transitions will be presented to the Pensions Minister in London on 29 January.


October 2012 saw the introduction of historic reforms to UK occupational pensions. By 2018, the vast majority of employers will be required to:

  • Offer a decent workplace pension scheme;
  • Make ‘employer contributions’ to the pensions of participating employees;
  • ‘Automatically enrol’ non-contributing and new employees into their pension scheme, and to re-enrol non-participants every two years.

The reforms are widely expected to be successful in boosting rates of participation in pension saving. Who saves for retirement?, the first study by ISER in partnership with the think-tank the Strategic Society Centre, looked at the savings decisions of over 25,000 UK workers, and the factors that influence participation in pension saving.

The report, published in December 2011, found that access to a workplace pension scheme and the presence of employer contributions were very strongly associated with participation in pension saving, suggesting that employer contributions are a key lever for raising pension participation.

Made possible by the support of Prudential, Who Saves for Retirement? used data from the first wave of the Wealth and Assets Survey (WAS) to explore the prevalence of pension saving across the population, and the precise influence of individual, household and employer characteristics on participation in pension saving.

The new second study will build on the first findings by using the next Wave of data from WAS and will examine changes in pension saving status. Against the backdrop of automatic enrolment, a critical issue is how many employees will drop out of the new pensions, what factors drive their decisions, and what can be done to minimise dropout.

This second Who Saves for Retirement? study will explore the transitions of individual employees into and out of pension saving over the period 2006-2010, together with the factors and attitudes associated with these decisions. A key focus will be the group of ‘eligible non-savers’: those employees who chose not to join an occupational pension with employer contributions despite one being offered at their workplace. The study will look at both the prevalence of eligible non-saving and the drivers and motivations that result in people being eligible non-savers.


The project aims to:

  1. Explore the number and type of employees who started and stopped pension saving during 2006-2010. What sort of pension saving did they do? How important were job changes in explaining these pension transitions?
  2. Identify and estimate the size of the group of eligible non-savers. What are their circumstances (finances, family, job type etc)?
  3. Find out why individuals do not save into a pension despite the availability of an eligible workplace scheme with employer contributions. What is the relative importance of objective circumstances and subjective factors?


The project will analyse data from Waves 1 and 2 of the WAS, both of which are now available.

The WAS collects information about the economic wellbeing of households and individuals in Great Britain. The WAS is a longitudinal survey, which commenced with a first wave of interviews carried out over two years from July 2006 to June 2008. The first wave of WAS ran during 2006-2008 and sampled all private households in Great Britain. The second wave covered July 2008 – June 2010 and the third wave commenced in July 2010 running until June 2012. Interviewees in each wave are followed up and invited to participate in the next wave of the survey two years later, thereby ensuring the data tracks changes in each person’s economic position over two-year periods.

Funding for the WAS came from the Office of National Statistics (ONS); Department for Work and Pensions (DWP); Department for Business, Enterprise and Regulatory Reform (BERR); HM Treasury (HMT); HM Revenue & Customs (HMRC); Department for Communities and Local Government (DCLG) and the Cabinet Office.

Team members

Dr. Mark Bryan

Reader in Economics - University of Sheffield

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Photo credit: jonux