New research on financial literacy versus time preferences

2 March 2016

"Two-lane road to retirement? Financial literacy versus time preferences" is a collaborative working paper released in connection with the Pensions Research Network. 

The paper examines how an individual’s time perspective and financial literacy is linked to their retirement saving behaviour. It tests the assumption that individuals don't save enough for their retirement because they have either limited cognitive abilities and are not financially literate, or they lack future time perspective and crave immediate consumption. It utilises the time perspective theory assumption that an individual's perception of time influences their actions and decision-making processes.

The research is based on a field survey of 306 working adults aged 35–65. The participants were surveyed on their financial literacy and were asked questions to determine their time preference. Three months later, they were surveyed a second time, on their retirement saving behaviour since the first survey.

Significant findings of the study show that the participants with a future time perspective had a higher predicted likelihood to save for retirement and a larger amount saved. Their financial literacy had no significant effect on their retirement savings.  

The authors of "Two-lane road to retirement? Financial literacy versus time preferences" are Anna Giardano, Orla Gough, Claudia Niza and Kristina Vasileva. 

For further information about the paper, please contact Dr Claudia Niza at [email protected].


About Westminster Business School:

Westminster Business School, University of Westminster, is one of London’s leading centres for professional business education. The School offers a wide range of undergraduate, postgraduate and professional programmes, including the AMBA accredited MBA.

All of our degrees are professionally focused and prepare students for working in their chosen careers. Alongside our quality courses, students have opportunities to enhance their practical experience through internships, professional placements and study abroad. Our central London location provides strong links with the business and government communities enabling us to bring practitioners and experts into the classroom on a regular basis.

We have a diverse student population which reflects London’s demographic variety and every year we welcome hundreds of students from Asia, Australia, continental Europe and the United States. We also have visiting scholars and researchers from all over the world. Although we are a school with a strongly international outlook, we also offer a range of part-time qualifications for working professionals.


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