The savings psyche of the UK is a new report, commissioned to investigate how those in employment in the UK think about savings, the decisions that they make (or, in many cases, do not make), the challenges associated with employee pension contribution schemes and what might be done to solve them. It reveals that the amount of choice around savings initiatives has led to millions becoming overwhelmed and therefore making no decisions whatsoever, giving rise to a ‘decision-making paralysis’. This, in turn, has caused a serious savings shortfall, based on a disparity between the amount people should be saving and the amount they are saving.
This report describes how saving affects different social groups in vastly different ways, introducing a set of personas that will enable the conversation about savings to take a more focused, consumer-centric tone. Moreover, it reveals that a new way of thinking about workplace saving is required in order to end the decision-making paralysis, address the shortfall and ensure that employers are able to take a responsible and active role in the financial well-being of their workforce.
The savings psyche of the UK is based on in-depth new research on a cross-section of the UK workforce. However, unlike previous reports into savings and pensions, it takes the investigation further through detailed analysis, undertaken by the University of Nottingham, which incorporates insights offered by behavioural economics and other theoretical perspectives on consumer behaviour and decision-making. By doing so, The savings psyche of the UK is able to delve further into issues affecting savings, closely examining why a choice paradox is causing a decision-making paralysis, how loss aversion is negatively affecting savings choices and how employers can leverage their employees’ trust to engender a step change in savings mentality.