“Pension communication and government policies should be tailored to individual preferences and goals”
What is the focus of the paper?
This paper examines the extent to which an individual’s gain focus (‘promotion orientation’) versus prevention focus (‘prevention orientation’) influences their investment decisions regarding pensions. The study considers both the type of investment (stocks, bonds, or savings) and the amount of the investment in these different categories.
What are the key findings?
The general gain or prevention focus (not specifically related to pensions) does not influence a person’s pension investment decisions. However, individuals with a gain focus specifically for pension investments are more likely to invest in stocks and bonds and allocate more funds to these assets than to savings products, opting for riskier investments. In contrast, individuals with a prevention focus invest more in savings products, which are less risky. The results also confirm previous findings that gender, education level, age, and marital status influence individuals’ investment decisions.
What are the implications?
- More targeted communication and recommendations regarding pension investments can help individuals make better investment decisions.
- The findings suggest that communication strategies and government policies supporting voluntary pension investments should be tailored to individual differences in gain and prevention focus regarding pension investments. A one-size-fits-all approach is not optimal.