Skip to content

Research Paper FSA Occasional Paper Series 21

Stopping short: why do so many consumers stop contributing to long-term savings policies?

Authors

Publication date

01 Jan 2004

Abstract

With a move away from up-front charges following the introduction of stakeholder pensions, consumers are no longer penalised for lapsing on many long-term savings policies. Nevertheless, persistency rates may still provide an (imperfect) indicator of sales quality and provide some information on how consumers are building up savings for the longer-term. Furthermore, persistency is an increasingly important issue for financial providers and the profitability of stakeholder-friendly products. This paper uses aggregate persistency data and survey data from the British Household Panel Survey to address three key questions: What drives persistency rates among different groups in the population? To what extent does non-persistency appear to reflect poor sales and advice, rather than events in consumers’ lives that were not predictable at the time of sale? Are there any messages that could be given to the industry or to consumers to help raise levels of persistency?

Subjects

Pensions and Savings And Assets

Links

http://www.fsa.gov.uk/pages/Library/research/economic/Occasional/index.shtml

Notes

FSA search; occasional paper

#512362


Research home

Research home

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest