IDEAS home Printed from
   My bibliography  Save this paper

Persistency of pension contributions in the UK: Evidence from aggregate and micro-data


  • Sarah Smith



This paper presents evidence on the persistency of contributions to individual pensions, including an analysis of micro-data from the British Household Panel Survey. It finds variation in persistency rates by gender, earnings and household income. Changes in income and consumption needs (for example, becoming unemployed or the arrival of a new baby) increase the probability of lapse, but household income also matters, suggesting that pensions may be less affordable for those on low incomes, even in the absence of shocks. The introduction in 2001 of stakeholder pensions, with a charge cap of 1% of fund value, transfers the financial penalty associated with lapsing from consumers to providers. Arguably this will makes it less likely that pensions are sold to those for whom they are less suitable. The only risk is if providers walk away from low income groups altogether.

Suggested Citation

  • Sarah Smith, 2006. "Persistency of pension contributions in the UK: Evidence from aggregate and micro-data," The Centre for Market and Public Organisation 06/139, Department of Economics, University of Bristol, UK.
  • Handle: RePEc:bri:cmpowp:06/139

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Vikas GAUTAM & Mukund KUMAR, 2012. "A Study On Attitudes Of Indian Consumers Towards Insurance Services," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 4(1), pages 51-62, March.
    2. repec:pal:gpprii:v:42:y:2017:i:4:d:10.1057_s41288-016-0037-9 is not listed on IDEAS

    More about this item


    Pension contributions; persistency.;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bri:cmpowp:06/139. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.