Annuity choices and income drawdown: evidence from the decumulation phase of defined contribution pensions in England.

Banks, James; Crawford, Rowena; Tetlow, Gemma

Banks, James; Crawford, Rowena; Tetlow, Gemma.

Afiliación

Banks J; University of Manchester , Manchester , UK ; Institute for Fiscal Studies , London , UK.
Crawford R; Institute for Fiscal Studies , London , UK.
Tetlow G; Institute for Fiscal Studies , London , UK ; University College London , London , UK (e-mail: gemma_t@ifs.org.uk ).

J Pension Econ Financ ; 14(4): 412-438, 2015 Oct.

Article en En | MEDLINE | ID: mdl-26500451

RESUMEN

We provide new empirical evidence on the importance of defined contribution pension wealth in England, and the nature of annuitization decisions taken by older adults who retire with such sources of wealth. Other things equal, financial literacy, and numeracy in particular, are important factors governing individuals' choices over whether to shop around for an annuity as opposed to taking the 'path of least resistance' option and purchasing from their original pension fund provider. This has important policy and welfare implications given that buying an annuity on the open market has significant financial benefits for most people. In the context of the increasing reliance on private provision for retirement, the importance of individuals having the financial literacy to successfully navigate complex financial decisions late in life should not be underestimated.

Palabras clave

D14; D91; Retirement saving; annuities; financial literacy; pensions

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Texto completo: 1 Colección: 01-internacional Base de datos: MEDLINE Tipo de estudio: Prognostic_studies Idioma: En Revista: J Pension Econ Financ Año: 2015 Tipo del documento: Article Pais de publicación: Reino Unido

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