Household financial decision making: Qualitative research with couples

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Conclusions
5.6 
Active rejection of pension saving
Households also present reasons for rejecting retirement planning altogether. The main reasons 
people give are their preference to focus on the present, their mistrust of pensions and their 
uncertainty about what the future will bring. Couples in the Unbalanced Responsibility group are 
most likely to express distrust of government ‘moving the goalposts’ for retirement; they also have
a tendency to link pensions with their negative perceptions of the government. 
Active rejection of pension saving is something to consider with regard to the introduction of 
automatic enrolment. Educating people not to opt out of their workplace scheme once enrolled 
may help to overcome this rejection, particularly for the Unbalanced Responsibility group, who 
display the most negativity towards automatic enrolment, in part because they understand it to be 
a government-led measure. However, the research indicates that couples in this group are typically 
the most inert when it comes to making retirement-related decisions: ironically, they could therefore 
be the least likely group to actively opt out of a scheme.
5.7 
The lifelong influence of inertia on retirement planning
The research indicates that several different layers of inertia exist, diverting people from long-term 
financial planning. In particular, ‘day-to-day’ inertia – the ongoing need to manage the home 
and family from one day to the next – tended to focus households in all of the groups on tactical 
financial issues, rather than strategic ones. While almost all couples appear to suffer to some degree 
from day-to-day inertia, couples in the Unbalanced Responsibility group profess to be most affected 
by the other types of identified in the research, ‘material’ inertia and ‘emotional’ inertia.
Due to the various types of inertia acting on couples throughout the life course, they typically find it 
very difficult to plan for retirement well in advance. Conversely, this inertness is likely to mean that 
they will remain in a pension scheme, should they be automatically enrolled by their employer.
The combination of the ‘unknown’ nature of pensions, the fact that they do not provide instant 
benefits, and the backdrop of multiple layers of inertia, has often resulted in passive – and often 
individual – retirement-related decision making in general.
Highlighting the instant benefit of beginning to save into a pension, and underscoring the immediate 
protection that doing so could provide, could be a way to address the lack of tangibility and 
feedback that makes the decision to save in a pension difficult for many. 
5.8 
Implications of the research findings for automatic 
enrolment
As noted above, the research indicates that in many cases, people will remain in employer schemes 
after they are enrolled automatically, and that this will be the outcome even among couples who 
are more sceptical about pension products, because of their relative inertness.
There is little evidence from this research to suggest that automatic enrolment could encourage 
‘trading up’, with a positive experience of being enrolled and receiving employer and government 
contributions leading people to increase their level of contribution. Given the passivity around 
pension decisions that this research has highlighted, it is unlikely that most will increase their 
engagement in this way as a result of being enrolled automatically in an occupational scheme.

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