Income Security and a Good Retirement

Income Security and a Good Retirement

New research on the role of guaranteed income in shaping people’s experience of retirement.

Research report: Income Security and a Good Retirement

Discussion paper: Income, Security and Wellbeing

One-page project summary: Income Security and a Good Retirement – One Page Summary

Launch slides: Do Pensions Matter – Slides

Data: Income Security and a Good Retirement – Full estimates for main research models

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The government’s Freedom and Choice changes to rules on Defined Contribution (DC) pension savings may see many individuals opting for a lower guaranteed income in retirement in favour of higher levels of cash savings and investments.

However, it would be reasonable to expect that level of secure income will have a key influence on people’s experience of retirement and their wellbeing, independent of their level of wealth.

To address a gap in evidence on this topic, the Strategic Society Centre undertook quantitative research analysing data from the English Longitudinal Study of Ageing (ELSA) to explore the independent effect of level of secure income on a range of retirement outcomes:

  • Health and mental wellbeing
  • Giving money to family and charity
  • Financial security
  • Participation in leisure activities
  • Civic participation
  • Life satisfaction and quality

The research found that even when controlling for wealth, level of guaranteed income was significantly associated with multiple and varied outcomes in people’s lives, such as:

  • Spending habits
  • Sense of autonomy and control
  • Life satisfaction
  • Participation in community and civic society

‘Income Security and a Good Retirement’ was made possible by the support of Just Retirement and the Joseph Rowntree Foundation.

You can download a copy of the research here: Income Security and a Good Retirement

For a non-technical summary of the research, please see the accompanying report below.

Authors: Dr Will Parry and James Lloyd

Twitter hashtag: #goodretirement

The estimate models resulting from the quantitative analysis can be downloaded as an Excel file here: Income Security and a Good Retirement – Full estimates for main research models **

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Alongside the research, the Strategic Society Centre has published a policy discussion paper entitled Income, Security and Wellbeing: Helping savers choose a good retirement.

This report considers what the findings of the research mean for UK private pensions policy, and the government’s position of neutrality regarding how individuals use their DC pension savings.

It argues that by adopting a position of neutrality, the government may oversee reductions in the wellbeing of the older population as a result of the April 2015 changes to rules on DC pension savings.

Recommendations of the report include:

  1. Actively promote receipt of a guaranteed income in pension policy to improve the wellbeing of retirees
  2. Educate savers before retirement about the role of guaranteed income for a good retirement
  3. Include information about the importance of guaranteed income to wellbeing in retirement in Pension Wise guidance and information
  4. Ensure receipt of a decent, guaranteed retirement income is the default option for DC pension savers
  5. Undertake regular research into the effect of the April 2015 changes on older people’s wellbeing

You can download a copy of the report here: Income, Security and Wellbeing: Helping savers choose a good retirement.

Author: James Lloyd

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