Saving for Retirement Intention, Context, and Behavior

Understanding the ways in which people save for their retirement is an urgent issue. So much has changed in the last 10 to 15 years, especially in the area of the provision of pensions and retirement income. Around the world, greater and greater responsibility is being allocated to individuals while governments discount their contributions to social security and employers retreat from the provision of supplementary retirement income. This book explores the behavioral revolution and its implications for understanding financial decision-making and saving for the future. Recognizing the profound implications of this research program, it goes beyond issues of risk aversion, framing, and decision-making to consider how social identity and the resources due to people by virtue of their place in society figure in savings behavior. It gives considerable attention to the context of the environment in which people make financial decisions, arguing that this allows a better understanding of the coexistence of sophistication and naivety apparent in patterns of retirement saving. Utilizing databases from the UK, the book provides an empirical foundation to its theoretical arguments, demonstrating how an integrated approach to individual financial decision-making is necessary if we are to address the apparent shortfall in many people's planning for the future. The book concludes by setting the agenda for the design, governance, and regulation of pension savings schemes consistent with delivering cost-effective solutions to pension adequacy. In these ways, it sets forth a strategy for rethinking individual behavior as well as the design of retirement income systems.

1. Introduction. 2. Environment and Behaviour. 3. Risk Propensities. 4. Sophistication, Salience, and Scale. 5. Being in the Market. 6. Housing, Retirement Saving, and Risk Aversion. 7. The Demand for Annuities. 8. The 'New' Paternalism. 9. Pension Adequacy and Sustainability.

Gordon L Clark FBA, DSc also holds a Professorial Fellowship at St Peter's College. Previously Director of the Oxford University Centre for the Environment, his research focuses on global finance and the governance of related institutions as well as the nature and scope of individual retirement saving in the context of market risk and uncertainty. Published books include the forthcoming Sovereign Wealth Funds (Princeton University Press 2012) (with Ashby Monk), the edited Managing Financial Risk (Oxford University Press 2009) (with Ashby Monk and Adam Dixon), The Geography of Finance (OUP 2007) (with Dariusz Wójcik), Pension Fund Capitalism (OUP 2000), European Pensions and Global Finance (OUP 2003), and the co-edited Oxford Handbook of Economic Geography (OUP 2000). At Oxford, he serves as a trustee of the Oxford Staff Pension Scheme and is an elected member of the University Socially Responsible Investment Review Committee. Kendra Strauss is a feminist economic geographer and Research Associate in Urban Political Economy in the School of Geographical and Earth Sciences, University of Glasgow. She holds a BA in Cultural Studies from McGill University and an MSc and DPhil in Geography from University of Oxford, and is also affiliated with the Inter-University Centre on Globalization and Work (CRIMT). Her research interests include the political economy of occupational pensions, critical approaches to financial decision-making and the gender pension gap. Her work also focuses on the interrelation of labour markets and pension systems at a range of scales, from macro political-economic processes of globalisation and financialisation to the rise of precarious work and trends in pension inequality. Janelle Knox-Hayes is an assistant professor in the School of Public Policy at the Georgia Institute of Technology, and a research associate at the Oxford University Department of Geography and Environment. Janelle's research interests lie in the institutional development of