IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Is there a retirement-savings puzzle?

Listed author(s):
  • James Banks


    (Institute for Fiscal Studies and University of Manchester)

  • Richard Blundell


    (Institute for Fiscal Studies and IFS and UCL)

  • 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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W95/04.

in new window

Date of creation: 16 Aug 1995
Handle: RePEc:ifs:ifsewp:95/04
Contact details of provider: Postal:
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page:

More information through EDIRC

Order Information: Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

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.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emma Hyman)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.