Employers play an important role in changing retirement behaviour

Oct 08, 2012

Department for Work and Pensions (DWP) funded research at the University has highlighted the key role played by employers in influencing people's decisions over retirement and extending working life.

Whether through choice, diminished health, or in response to employer policies, a significant proportion of people leave the early. The DWP is committed to encouraging people to work for longer and save for later life.

Following a review of , the researchers found a significant proportion of people show an interest in extending their working lives, particularly if this embodies choice and flexibility over hours worked, in particular the opportunity for reduced hours, part-time work or phased retirement.

Echoing insights from Thaler and Sunstein's influential publication 'Nudge', a key conclusion is that people tend to limit their consideration of options to choices they are presented with and are prone to be tempted by short-term financial gains, such that they make decisions which may not be in their long term interest.

Dr Andrew Weyman from the Department of Psychology said: "Most employees are passive rather than active decision makers and are susceptible to an array of situational influences or 'nudges'. Both the Government and employers play a key role in influencing and defining employees' pension and retirement decisions."

Employers play a in nudging people to retire or to work longer. Positive nudges might include offering working hours that are attractive to people; making to job-demands and providing information to help people make better decisions over income planning for retirement.

Negative nudges might include attractive redundancy packages; lump-sum payments and early pension draw-down which can motivate people to retire early and make poor .

For policy makers, motivating extended working life requires a focus on finding ways to achieve behaviour and culture change amongst employers as well as employees.

Explore further: Study shows employees become angry when receiving after-hours email, texts

add to favorites email to friend print save as pdf

Related Stories

Study examines working couple's retirement patterns

Nov 18, 2008

When retiring, men are more likely than women to move directly from work to retirement, but overall the retirement patterns for dual-income married couples are complex and call for additional considerations in planning for ...

'Credit Crunch' Will Hit Retirees in Unequal Ways

Oct 09, 2008

(PhysOrg.com) -- How severely retirees will be affected by the continuing financial crisis and subsequent "credit crunch" depends to a considerable extent on the kinds of retirement plans they rely on for retirement income, ...

Recommended for you

Predicting human crowds with statistical physics

Feb 27, 2015

For the first time researchers have directly measured a general law of how pedestrians interact in a crowd. This law can be used to create realistic crowds in virtual reality games and to make public spaces safer.

Broken windows thesis springs a leak

Feb 27, 2015

The broken windows theory posits that minor misdemeanors, like littering or graffiti spraying, stimulate more serious anti-social behavior. LMU sociologists now argue that the idea is flawed and does not ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.