Nudging for retirement

  • 2020

Getting young people to save for the future can be challenging.


Given young people’s financial constraints and the human tendency to value the present over the future, there is a need to find innovative ways to communicate with them about saving. Several behavioural insights could help young people to get into the habit of saving, including:

  • Present bias. This term refers to the fact that people tend to place more importance on costs and benefits in the present than on ones in the future. Overcoming this bias is key to helping people save for the future.
  • Framing. This term refers to how information is presented. The way a message is framed affects how we interpret the information and act on it. By reframing pensions as investments rather than as savings, it may be possible to encourage people to use them more. 
  • Rules of thumb. Also known as ‘heuristics’, rules of thumb are mental shortcuts that we use to help us make decisions, particularly when we are uncertain or have incomplete information. By giving young people a rule of thumb for how much their savings might be worth in the future (e.g. by retirement age, £1 saved at age 25 could be worth four times as much as £1 saved at age 55), we hoped to boost engagement with saving behaviours. 

Using our Predictiv platform, we conducted online experiments to gauge the effects of different ways of framing financial communications on young people’s attitudes to pension contributions.

Result & Impact

Tangible labelling and reframing savings as ‘investments’ increased young people’s wish to make contributions, while future-focused reflections increased engagement.