Saving behaviour, expectations and financial hardship

Publication type

Conference Paper


Karl Taylor

Publication date


We consider the determinants of saving behaviour on a regular monthly basis and private pension contributions over a period of two decades. Moreover, we explore the relationship between both types of saving which clearly differ in terms of their liquidity and expectations as measured by being pessimistic about future finances. We also focus on the influence of the prevailing macroeconomic environment and those individuals in low pay. We exploit UK panel data from 1991 onwards drawn from the British Household Panel Survey and Understanding Society. Hence, importantly our period of analysis covers two recessionary periods including the recent financial crisis. We then explore the effects of saving on a regular basis for future financial hardship in order to shed light on whether regular savings act as safety net for future financial difficulties. The results suggest that being pessimistic about future finances is positively associated with saving on a regular basis, which accords with precautionary saving motives. Our findings also indicate that saving on a regular basis is inversely associated with future financial hardship.


Pensions, Savings And Assets and Finance