Pensions, financialisation, and the psychological contract - how do ‘experts’ make pension choices and whom do they trust to provide pension information?

Burrows, Tim

Abstract

Higher life expectancy and recent changes to legislation have brought the issue of occupational pensions to greater prominence. How people make pension choices, what information they use, and whom they trust when doing this are therefore important issues for individuals and society. This study aims to shed light on these questions. In doing so this thesis contributes to theory by using a combination of financialisation and the psychological contract to take a different view of the pension landscape in the UK and contributes to practice by considering the response of individuals to the complexity of pension decisions.
This DBA thesis uses a case study approach to explore the views and experiences in relation to pensions of a group of employees with considerable financial expertise at the Institute of Chartered Accountants of Scotland. The study is qualitative, inductive, and adopts an interpretivist perspective. Information was gathered from semi-structured interviews, which allowed for consistency, but also provided an opportunity for individual comment and feedback from participants. The data was analysed thematically and the themes that emerged were used to frame the resulting study.
The study’s findings show that pension decisions are complex and many individuals, despite good intentions and expertise, put more immediate life events and priorities ahead of pension investment. They tend to focus on input factors, particularly their bottom-line salary, rather than the output from pension investment that will accrue in future. Fundamental to pension decisions are the high levels of trust of employers, pension providers, and the lack of trust in financial advisers. These findings mean there is the potential that pensions will not meet the needs of employees in retirement.
The study makes a number of recommendations – that financial education (including pensions) is taught in schools, pension scheme members should have an informed choice of default fund, the default pension fund is monitored for performance and suitability, there is greater use of financial advice, and that communication from employers is improved. These recommendations will help to improve pensions for future generations of employees.

Citation

Burrows, T. Pensions, financialisation, and the psychological contract - how do ‘experts’ make pension choices and whom do they trust to provide pension information?. (Thesis). Edinburgh Napier University

• Thesis Type: Thesis
• Deposit Date: Aug 23, 2024
• Publicly Available Date: Aug 23, 2024
• DOI: https://doi.org/10.17869/enu.2024.3789771
• Award Date: Jul 4, 2024