Extending Working Life in the NHS – Opportunities, Challenges and Prospects Work and Retirement Decision-making – The need for a broader perspective on choice architecture.

Arguably the key finding on pension investment and retirement decision making is that most UK citizens are not active planners. Rather, they are more disposed to react to options they are presented with. Although there is almost universal acceptance of the need to make financial provision for retirement, there is significant inertia and reticence over active engagement. Most people have limited knowledge or understanding of options or their implications and those are motivated to engage tend to become bewildered by the complexity and unknowable elements. People are also being asked to make their choices against a background of unprecedented (in the post WW2 period) flux and fluidity in employer and State pension arrangements. Recent rises in State pension age, the prospect of further rises, combined with high profile media reporting of pension failures, tends to interpreted as a system in crisis. Potentially corrosively, there is a risk that the associated uncertainty may feed latent procrastination and inertia, to further inhibit already weak motivations to engage in saving for tomorrow (Pettigrew, et al, 2007; Wicks and Horack, 2009); rather than strengthen motivation to plan. The UK Government’s auto-enrolment pension scheme goes some way towards addressing this, but there are questions over whether its voluntary nature and realised pension value will prove to be sufficient to be meaningful and the impact of planned rises in employee contributions on opt-out rates.