Pensions Reform An update on the GB Wealth and Assets Survey June 2007 Angela Donkin Cross-cutting Pensions Analysis Division Department for Work and Pensions

Pensions Reform Review  Sample design  Wave one questionnaire content  Other survey characteristics

Pensions Reform Sample  Aim: Achieved 32,000 households at wave one  All adults aged 16+ in household  Spread over two years: July 2006 to June 2008  Oversampling wealthy  All responding households re-interviewed at wave two after two-year gap

Pensions Reform Wave one questionnaire content (1) Assets  Accounts and investments  Pension schemes  Property, household goods, vehicles  Business assets  Trusts  Children’s savings Debts  Mortgages and loans secured on main residence  Equity release  Credit and store cards, hire purchase, loans  Arrears on household bills and other payments

Pensions Reform Wave one questionnaire content (2) Income  Earnings, benefits, pensions, other regular income  Inheritances, lifetime gifts, other lump sums Behaviours and attitudes  Saving and borrowing  Saving for retirement, pension sources  Financial management, expectations  Attitudes to risk Classificatory  Household composition, ethnicity, tenure  Economic activity and education  Health and caring

Pensions Reform Other survey characteristics  Linkage to administrative data  Linkage to employer data  Sub-sample of 1,500 households most in debt re- interviewed after one year

Pensions Reform Update  Wave one  Monitoring response  Dissemination plans  Editing and imputation  Some early results  Wave two  Questionnaire development

Pensions Reform Monitoring Response: 1 st 6-9 months HouseholdIndividual % of co-operating households 55%97% % proxy interviews14% Consent to follow up92% Consent to NINO linkage55% Consent to employer linkage (in scheme)60% Consent to employer linkage (not in scheme) 50% Households deemed to have given fairly or very accurate financial information 95%

Pensions Reform Dissemination plans Early results December 07  Have first quarter frequencies for validation  Publishing from year one data in December on ONS website  Top line results  No imputation of missing data  Mid points taken  Need to consider priorities for early results and caveats Main report Spring 09  No plans as yet.

Pensions Reform Editing and Imputation  Interviewer checks are ongoing  Limited validation against other sources  Not imputing missing data until year 2  Temporarily planning to use mid points of bands for banded responses. More sophisticated methodology to be considered for final data set

Pensions Reform Some really early results – not weighted etc etc.  6% of households have 2nd properties  Of over 40 year olds - 70% think they will get at least half of what they currently have now. 45% think they’ll get two thirds or more..  32% of people always have money in their purse at the end of the week/month, 45% keep it in their current accounts and 9% spend it.  27% always or nearly always run out of money at the end of the week/month and they borrow from friends, cut back on spending and get overdrafts  For around half of the savers their main reason for saving is for unexpected expenditures, and while they also saved for retirement this was less important.  Of the third who had not saved in the last 3 months, just 26% intended to save in the next 12 months Wealth and Assets Not for publication or citation

Pensions Reform Risk averse or wrong questions?  £1000 or one in 5 chance of winning ten thousand - what would you choose? 77% £ % £10,000  £1000 today or £1100 next year - what would you choose? 78% £1000 today, 20% £1,100.1k next year Should we keep these? Not for publication or citation

Pensions Reform Wave 2 development

Pensions Reform Suggested changes  Drop some classificatory questions  Try to identify reasons for increases/decreases in assets – however can’t do this for each asset.  Try to identify savings behaviour and changes  Try to identify large expenditures – how? as % of income, what absolute cut off point?  Identify key life events that initiate saving/spending  Monitor whether or not intention to save has resulted in actual behavioural change and why not.  Try to identify churn in debt/saving  Questions on parental socio-economic position

Pensions Reform Wealth and Assets Timetable Summer 07 Dec 07 Jan 07July 08Dec 08Spring 09 Wave 2 Consultation Year one findings ONS website W2 pilot study End W1 fieldwork Start W2 fieldwork Release of W1 dataW1 report

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