IDEAS home Printed from
   My bibliography  Save this paper

Is there a retirement-savings puzzle?


  • James Banks

    (Institute for Fiscal Studies and University of Manchester)

  • Richard Blundell

    (Institute for Fiscal Studies and University College London)

  • Tanner, Tanner

    (Institute for Fiscal Studies)


In this paper we ask whether households are saving enough for their retirement. We use data on income, expenditure and expenditure components to analyse patterns of behaviour at and around the time of retirement. For successive date-of-birth cohorts we compare periods of unemployment to periods of retirement and separate expenditures into categories reflecting work-related expenditures, basic necessities and other goods. We find that income typically falls by more at unemployment than retirement, but the reverse is true for expenditure. We observe falls in expenditure at retirement for all expenditure categories. Using a stochastic life-cycle model including mortality rates we assess the anticipated impact of retirement on consumption against that of unemployment. The inter-relationship between goods and leisure explains a large part of the persistent fall in expenditure at retirement. We argue that the only way in which the life-cycle hypothesis could be reconciled with the remaining unanticipated dip in consumption would be with the systematic arrival of unexpected adverse information at the time of retirement.

Suggested Citation

  • James Banks & Richard Blundell & Tanner, Tanner, 1995. "Is there a retirement-savings puzzle?," IFS Working Papers W95/04, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:95/04

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    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:ifs:ifsewp:95/04. See general information about how to correct material in RePEc.

    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 bibliographic 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.

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

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.