Pension financialisation and workplace pension wealth inequality: evidence from Britain
Bonizzi, B. 
ORCID: 0000-0003-0122-8739, Dagdeviren, H. & Tippet, B. (2025).
Pension financialisation and workplace pension wealth inequality: evidence from Britain.
Socio-Economic Review,
doi: 10.1093/ser/mwaf068
Abstract
The growth of defined contribution pensions, in which retirement depends on individual savings and financial market investments, has been a key aspect of household financialisation. This paper examines the impact of the shift from defined benefit to defined contribution pensions on workplace pension wealth inequality in Britain. We propose a conceptual framework to interpret the effect of this shift, highlighting four key channels through which defined contribution pensions can aggravate pension wealth inequality: the greater inequality of pension contributions, lack of redistributive mechanisms within pension schemes, the compounding effects of (missed) contributions over time, and unequal capacity to take on risks. Using data from the UK Wealth and Assets Survey, along with quantile regression and decomposition analysis, we find corroborating evidence that reliance on defined contribution pensions exacerbates workplace pension wealth inequality, supporting the plausibility of our proposed four channels.
| Publication Type: | Article |
|---|---|
| Additional Information: | © The Author(s) 2025. Published by Oxford University Press and the Society for the Advancement of Socio-Economics. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial License (https://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited. For commercial re-use, please contact reprints@oup.com for reprints and translation rights for reprints. All other permissions can be obtained through our RightsLink service via the Permissions link on the article page on our site—for further information please contact journals.permissions@oup.com. |
| Publisher Keywords: | Pensions, Financialisation, Wealth inequality, Quantile regressions |
| Subjects: | H Social Sciences > HG Finance |
| Departments: | School of Policy & Global Affairs School of Policy & Global Affairs > Department of International Politics |
| SWORD Depositor: |
Available under License Creative Commons Attribution Non-commercial.
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