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Nudges and Networks: How to Use Behavioural Economics to Improve the Life Cycle Savings-Consumption Balance

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  • David Blake

    (Pensions Institute and Finance Faculty, Bayes Business School, City University of London, London EC1Y 8TZ, UK)

Abstract

Many people find it difficult to start and maintain a retirement savings plan. We show how nudges can be used both to encourage people to save enough to provide an acceptable standard of living in retirement and to draw down their accumulated pension fund to maximize retirement spending, without the risk of either running out of money or leaving unintended bequests. Networks can help too, particularly employer-based networks. However, the nudges and networks are more likely to be effective if they have legislative backing and support.

Suggested Citation

  • David Blake, 2022. "Nudges and Networks: How to Use Behavioural Economics to Improve the Life Cycle Savings-Consumption Balance," JRFM, MDPI, vol. 15(5), pages 1-17, May.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:5:p:217-:d:814683
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    References listed on IDEAS

    as
    1. David Blake & John Pickles, 2021. "Mental Time Travel and Retirement Savings," JRFM, MDPI, vol. 14(12), pages 1-13, December.
    2. Kevin Dowd & David Blake, 2022. "Good Practice Principles in Modelling Defined Contribution Pension Plans," JRFM, MDPI, vol. 15(3), pages 1-21, February.
    3. Blake, David & Duffield, Mel & Tonks, Ian & Haig, Alistair & Blower, Dean & MacPhee, Laura, 2022. "Smart defaults: Determining the number of default funds in a pension scheme," The British Accounting Review, Elsevier, vol. 54(4).
    4. Victor Stango & Jonathan Zinman, 2009. "Exponential Growth Bias and Household Finance," Journal of Finance, American Finance Association, vol. 64(6), pages 2807-2849, December.
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    Cited by:

    1. Piotr Bialowolski & Jing Jian Xiao & Dorota Weziak-Bialowolska, 2024. "Do All Savings Matter Equally? Saving Types and Emotional Well-Being Among Older Adults: Evidence from Panel Data," Journal of Family and Economic Issues, Springer, vol. 45(1), pages 88-105, March.
    2. Shunlin Wang & Yifang Chen, 2022. "Consumption Coupons, Consumption Probability and Inventory Optimization: An Improved Minimum-Cost Maximum-Flow Approach," Sustainability, MDPI, vol. 14(13), pages 1-14, June.

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