Analysis by paralysis: the pension purchase decision process

Attempts to understand the consumer behaviour in the context of the pension purchase process, including the decision process and factors affecting the decision.

Focus groups were conducted among manual and clerical grades of employees within a public sector organization who were members of an occupational pension scheme.

Despite the relative importance of pensions and the degree of risk associated with the purchase, the findings clearly indicate that purchasing decisions in this context are neither completely informed nor rational. The process described by focus group participants suggests “analysis by paralysis”, characterized by complexity, confusion and apathy.

Small number of focus groups and a focus on manual and clerical grades of employment only. A larger sample and representation of other grades of employment might yield differences in decision making between different segments of the population.

Provides useful insights for providers of pensions in understanding the role of information, reference groups and professional advice in the marketing of pensions.

Addresses a key concern of government – insufficient pension provision – and helps to understand some of the barriers and challenges facing individuals in making pension decisions.