How does pension saving change when individuals complete repayment of their mortgage?

Arbeitspapier

We examine the extent to which owner-occupiers in their 50s and 60s change their private pension saving when they complete repayment of the mortgage on their primary residence. Using panel data from a household survey, the English Longitudinal Study of Ageing, we identify those who completed repayment of their mortgage as anticipated two years prior. Despite mortgage expenditures falling by over £200 per person on average, there is little resulting change in average pension saving. This is because only a small minority of individuals react - the probability of an individual increasing their monthly pension saving by more than £150 increases by only 5 percentage points on completing repayment of a mortgage. This suggests that if policymakers wish to influence behaviour in order to increase private pension saving, interventions targeted at those completing their mortgage repayment could be a tractable approach. Such individuals would be able to increase pension saving while maintaining spending at recent levels.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFS Working Paper ; No. W20/39

Classification and Topics

• Classification: Wirtschaft ; Household Saving; Personal Finance ; Intertemporal Household Choice; Life Cycle Models and Saving
• Subject: Altersvorsorge ; Sparen ; Hypothek ; Rückzahlung ; England

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crawford, Rowena
• Event: Veröffentlichung
• (who): Institute for Fiscal Studies (IFS)
• (where): London
• (when): 2020

Further information

• DOI: doi:10.1920/wp.ifs.2020.3920
• Handle: http://hdl.handle.net/10419/242898
• Last update: 10.03.2025, 11:45 AM CET