Press release

Publication of DWP working paper: No 87: Research on Predictions of Incomes in Retirement

Working Paper which presents the findings from research on the nature and cognitive basis of people’s predictions of income in retirement.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


The Department for Work and Pensions today publishes a Working Paper which presents the findings from research on the nature and cognitive basis of people’s predictions of income in retirement. The main aims were to investigate not only the extent to which people are able to predict their potential income in retirement, but also what sort of information and reference points they use and the attitudes and behaviours this reveals.

The main findings were as follows:

  • The research found that when asked to think about and predict their own income in retirement, people often tended to focus on their various individual potential sources of income such as pensions, savings and property rather than income ‘in the round’. People also tended to conflate the income they thought they would have at retirement with the income they felt they would need and/or they aspired to. 
  • Unsurprisingly, people varied greatly in the ease with which they were able, and indeed willing, to predict their income in retirement. Some spontaneously drew on quite detailed awareness of multiple sources of income while others needed significant prompting, even to just hazard a guess. The sample of people interviewed could be allocated across four groups according to the ease with which they were able and willing to make predictions. The main differentiating factor determining group membership was attitude to and engagement with their financial future, while age, current income and number of planned income streams were also significant.
  • People adopted three different approaches when making their predictions: guesses, rules of thumb and financial calculations. There was a broad ‘read across’ between the four groups identified and the approaches adopted, although there was some overlap in approaches used between and within the groups. Rules of thumb varied, from using current income comparisons to projecting forward individual income streams.

Notes for Editors:

  1. “Research on Predictions of Income in Retirement”, by Kotecha M., Kinsella R. and Arthur S. , National Centre for Social Research, 2010, is available on the DWP website:
  2. This research was not specifically designed to test the accuracy of people’s predictions. What was of most interest were the mechanisms and references people used to make predictions.
  3. The main research method was a series of in-depth interviews with 30 people with a variety of backgrounds and characteristics. This included interviews with people who were not currently saving into a pension.
Published 2 November 2010