Savings and life events

The aim of this project was to investigate which groups are able to save, and which are not. It also analysed the effects of particular life events, such as leaving home, marital breakdown, and in particular retirement, on patterns of saving. A secondary objective was to consider how far the possession of savings is able to offset the potentially negative effects of particular transitions, including job loss, compared to those without accumulated assets.

The overall aim of the research was to study the relationship between key life events and patterns of saving and dis-saving. Within this, there were a number of specific objectives:

• To identify the range of purposes for which people save and how many and what kinds of people save for specific life events.
• To investigate, where possible, the links between pensions and savings and also between levels of borrowing and saving.
• To identify which life events are preceded by an increase or a decrease in saving activity and the circumstances under which this tends to happen.
• To identify how the level of saving affects the impact of particular life events on measures of well-being.
• To identify how people's view of their future living standards influences their pattern of saving.
• To identify how receipt of a 'windfall' impacts on people's pattern of saving, and current and future living standards.
• To explore the implications of these findings for current and future government policy on savings, pensions and social security and fiscal policy.

The study involved secondary analysis of ten waves of the British Household Panel Survey. The savings module within BHPS asks all individual respondents a relatively comprehensive series of questions, and the core of this section on savings has been largely unchanged since 1991 (the first wave). Additional information on wealth and debt was collected in waves 5 and 10.

Savings and life events [ Full report (PDF, 474kB) | Research summary (PDF, 26kB) ]