Can the retirement consumption puzzle be resolved? Evidence from UK panel data

Arbeitspapier

This paper uses UK panel data to shed further light on the fall in spending at retirement (the “retirement-consumption puzzle”). It compares the profiles of spending and well-being at retirement for different groups, defined according to whether retirement is voluntary or involuntary. Where retirement is voluntary, food spending and individual well-being are largely smoothed through retirement; where retirement is involuntary, both food spending and well-being fall. This is consistent with the retirement consumption puzzle being linked to negative wealth shocks. However, there remains one group for whom retirement appears to be voluntary, yet whose spending falls. Fully resolving the puzzle requires a better understanding of how the nature of retirement links to spending and of how different groups substitute leisure for consumption.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFS Working Papers ; No. 04/07

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
• Subject: Retirement spending ; panel data ; Verbraucherausgaben ; Konsumentenverhalten ; Lebensstandard ; Alte Menschen ; Großbritannien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Smith, Sarah
• Event: Veröffentlichung
• (who): Institute for Fiscal Studies (IFS)
• (where): London
• (when): 2004

Further information

• DOI: doi:10.1920/wp.ifs.2004.0407
• Handle: http://hdl.handle.net/10419/71472
• Last update: 10.03.2025, 11:42 AM CET