University students and retirement planning: never too early

Abstract

Purpose The purpose of this paper is to investigate the main predictors of university students’ intention to invest in a pension fund: an understanding of how young people perceive retirement planning is relevant for its policy implications. Design/methodology/approach The authors apply the theory of planned behaviour (TPB) proposed by Ajzen (1985) which explains how human behaviour is guided, and provides a framework to explore the underlying beliefs that affect one’s behaviours. Findings The evidence on a sample of Italian university students highlights that the TPB predictors, pension knowledge, money management and the highest level of financial literacy, positively influence their intention to invest in a pension fund. Research limitations/implications Although the authors are aware of the limitations of the analysis (limited to a specific country and to a specific financial product), the authors believe that the study has the merit of offering a number of ideas for further research. In fact, there are few contributions in the literature that identify the intention of young people to save for retirement. The study sheds light on this important issue. However, because it is limited to Italian university students, its findings cannot be generalised. Practical implications The study can be used by regulators, financial educators, counsellors and public institutions to increase the propensity of young people to plan for their future and guide them towards attitudes and behaviours most likely to increase their savings for retirement. Social implications The evidence suggests that regulators, institutions and educators should improve the information that is provided to families first and to the younger generations – at school, for instance – about the functioning of the pension system. The survey’s findings emphasise that university students are generally unaware of the many reforms to the system while believing that their state pensions will be sufficient to maintain a retirement standard of living that is the same as the standard of living achieved during their working lives. Originality/value In the authors’ knowledge, there are not studies that focus on the youngs’ intention to invest in a pension fund. The authors believe that millennials are the most hitted by the Fornero’s reform and understand which predictors affect this intention can allow to drive the decision in investing in these important financial tools.