Nest Corporation research: Financial crisis changed saving behaviours of DC pension scheme members

The financial crisis significantly changed the saving behaviour of defined contribution (DC) pension scheme investors, according to research commissioned by the National Employment Savings Trust (Nest).

The Reactions to volatility and loss research, conducted by DCisions, consisted of analysis of two groups of savers: a target or proxy group whose personal characteristics were similar to the target audience of Nest and a control group.

Almost half (48%) in the control group and (46%) in the target (proxy) group made changes to their savings. And 14% in the target group ceased making pension contributions, compared to 10% in the control group.

More of those (6%) in the control group increased their contributions, compared to 3% in the target group.

Meanwhile, the target group was less likely to switch funds with 10% of the sample showing some sort of activity, compared to 13% of the control group.

Mark Fawcett, chief investment officer at Nest Corporation, said: “The challenge for Nest is to encourage our members to start saving, continue saving and take appropriate investment risk to support them in building a better income in retirement.

“When developing Nest’s investment strategy our starting point and our first investment belief is the importance of understanding our members. We have developed an investment approach that takes account of their attitudes, aspirations and, in some cases, fears.”

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