Contemplating the Future Increases Intentions to Save for Retirement in Young People

Abstract

We conducted an online experiment with 2,822 young people in the UK to increase comprehension of the recommended levels of contributions to savings for retirement. In this randomised controlled trial, we showed respondents a scenario of a hypothetical 25-year-old with median income and default contributions, and presented information about their situation. Our results show that respondents are more likely to recommend that the 25-year-old make additional contributions when they are shown information showing how small increases in current retirement savings contributions can lead to large returns in the long term. However, when asked whether this information increased participants’ own likelihood of increasing their own retirement savings contributions, the most effective information involved asking participants to think about their retirement, including activities they wanted to do and people they wanted to spend time with. This suggests that attempts to increase engagement with retirement savings by showing financial information may not be as effective as more emotional appeals that encourage reflection on future lifestyle objectives.