Personality and Planning for Retirement: How the Big Five Personality Traits Link to Decisions on Pension Participation

Abstract

This paper investigates the relationship between the big five personality traits and participation in pension schemes using British household survey data from Understanding Society (the UK Household Longitudinal Study). Our results show Extraversion significantly reduces the likelihood of participating in employer and individual personal pensions. Individuals who are high in Conscientiousness are more likely to invest into personal pensions and tend to pay more into these plans. Agreeableness and Extraversion are negatively correlated with the amount paid into personal pension schemes. This study discusses these findings in detail and offers policy implications.

Keywords: Big five personality; Pension participation and contribution; Psychology and economics; Extraversion; Agreeableness; Conscientiousness