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Retirement saving and attitude towards financial intermediaries – Evidence for Germany

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Author Info
Kathrin Dummann () (University of Rostock)

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Abstract

People often disregard the need for individual savings for old-age although a decreasing rate of birth and an increasing life expectancy make it necessary to save additional money for retirement by using private or occupational pensions. Due to a lack of financial literacy and a variety of products it is important that people consult financial intermediaries like banks and insurance companies which support their savings plans. We apply the behavioral life-cycle hypothesis to explain whether people of different socioeconomic attributes contact diverse financial intermediaries and which motives promote this consultancy. To answer those and other questions on differences in consulting behavior of financial intermediaries Probit regressions are used. We find that income, low risk aversion and the presence of banks in the local surrounding have a large impact on oldage savings behavior. Our results differ across intermediary groups. They have important policy implications as better financial literacy and enhanced consulting activities may cause less old-age poverty and more trust in the financial system.

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File URL: http://www.wiwi.uni-rostock.de/fileadmin/Institute/VWL/VWL-Institut/RePEc/pdf/wp099thuenen.pdf
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Publisher Info
Paper provided by University of Rostock, Institute of Economics, Germany in its series Thuenen-Series of Applied Economic Theory with number 99.

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Length: 54 pages
Date of creation: 2008
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Handle: RePEc:ros:wpaper:99

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Related research
Keywords: life-cycle hypothesis; pension savings; financial intermediaries; financial literacy;

Other versions of this item:

Find related papers by JEL classification:
D14 - Microeconomics - - Household Behavior - - - Personal Finance
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages

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References listed on IDEAS
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