Trading Pay for Pensions: Evidence from a Discrete Choice Experiment in the United Kingdom

Nick Deschacht (), Inés Guillemyn () and Suncica Vujic ()
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Nick Deschacht: KU Leuven
Inés Guillemyn: University of Antwerp
Suncica Vujic: University of Antwerp

No 18164, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study estimates individuals’ willingness to pay for pension benefits using a discrete choice experiment with fictitious job advertisements conducted among workers in the United Kingdom (UK). The results indicate that workers are willing to trade off current pay for additional pension benefits, with the marginal worker willing to forgo 0.3% of their current wage for a one percentage point increase in pension benefits. Willingness to pay varies significantly across individuals, increasing with proximity to retirement age, higher income levels, financial planning and financial literacy.

Keywords: discrete choice experiment (DCE); wage-pension trade-off; United Kingdom (search for similar items in EconPapers)
JEL-codes: C9 D9 J16 J32 (search for similar items in EconPapers)
Date: 2025-10
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