There are four types of pension savers that members fit, which affect the way they engage with saving, new research by an academic working with the Pensions Policy Institute has found.

The PPI’s latest publication, Engagement pathways in workplace pensions, undertaken by the University of Manchester’s Dr Hayley James, outlines the findings from qualitative research aimed at how individuals make decisions following automatic enrolment; these include opting out, sticking to the default funds, or increasing contributions.

The findings suggest that there are a variety of approaches to pension saving and identifies a typology of decision-making. The research found that there are four approaches to pension decisions, which are threshold adults, protectionist savers, market investors and sceptical speculators. It was found that these groups engage with workplace pension saving in very different ways.

In addition, the research also demonstrated how people adjust their approach over time, suggesting pathways of engagement in workplace pension saving. The report said that these pension approaches represent specific challenges for policy and industry, in recognising and responding to the complex and varied nature of engagement with pension saving.

The report stated that the pathways raise important considerations. For example, market investors, who who were the most engaged group, seemed to have specific knowledge, access, social and economic capital, which suggests that it is unlikely that this approach could be followed by everyone, the report noted.

“There is a concern about to what extent we can expect people to engage in pension saving and what this means for adequacy in later life,” the report said.

The report recommended key messages that industry could convey to the different groups. For example, with sceptical speculators, the report said the industry should make them aware that it understands that pension saving might no feel like the right thing, and that they may prefer other forms of saving and investment.

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