How futures thinking can support retirement decision-making

id

Why planning for later life is challenging and what may improve outcomes

Planning for retirement and later life is becoming more complex. In the UK, rising living costs, changing career patterns, and longer working lives mean people are making more financial decisions under conditions of uncertainty.

A new briefing paper from the Standard Life Centre for the Future of Retirement, developed with futures psychologist Emily Shipp, examines why this is the case and how people can be better supported to make longer-term decisions.

The evidence suggests that the challenge is not solely a lack of information. It is also that thinking clearly about the future is inherently difficult.

id

Why is long-term financial planning difficult?

Most people recognise the importance of planning ahead. However, translating this into action is considerably more demanding.

For many people, the future can feel distant and abstract, while present needs are immediate and pressing. Stress and financial pressure can make it harder to engage with long-term considerations, even when people recognise the importance of planning ahead.

In our research on retirement decision-making, individuals describe feeling uncertain and overwhelmed when making financial decisions, and unsure how to act on the information available to them, even where information is accessible.

This suggests that improving engagement is not simply a matter of providing additional data. It requires supporting people to interpret and apply information within the context of their own circumstances.

How effective is “future self” engagement?

Many engagement approaches focus on encouraging individuals to picture their future selves.

While there is evidence that this can increase intention to save, the overall impact appears limited:

• Effects are often short-lived
• It does not consistently translate into sustained action
• It may feel unrealistic or disconnected from present circumstances

In some cases, these approaches may also contribute to anxiety about later life.

Taken together, this indicates that focusing on a single projected future is unlikely to be sufficient to support effective decision-making.

What is futures thinking, and why does it matter?

Futures thinking refers to the way individuals imagine and evaluate possible future scenarios in order to guide decisions in the present.

This briefing paper, written by futures psychologist Emily Shipp, draws on behavioural science and psychology to show that individuals do not typically engage with a single future outcome. Rather, they tend to:

• Consider multiple possible futures
• Compare options and potential trade-offs
• Focus on scenarios that feel plausible in their current circumstances

This aligns with broader evidence that financial decision-making is shaped not only by understanding, but also by emotional and behavioural factors.

A different approach: supporting navigation between futures

The findings point to the need for a different approach to engagement.

Rather than motivating individuals towards a single projected outcome, there is value in supporting them to navigate between a small number of relevant and realistic future scenarios. This research highlights the value of supporting people to navigate between a small number of plausible futures.

This may involve:

• Presenting more than one potential pathway
• Making outcomes tangible and meaningful
• Linking future scenarios to decisions that can be taken in the present

This builds on wider Standard Life Centre work, including Defying Inertia: Employers’ role in boosting pension saving beyond the auto-enrolment default, which shows that engagement is more effective when linked to key moments.

When does futures thinking support decision-making?

Futures thinking can be a useful tool, but its effectiveness depends on context.

It is most effective when:

• Individuals feel sufficiently stable to look ahead
• Scenarios are realistic and personally relevant
• It is clearly linked to practical, near-term decisions

It is less effective when:

• Individuals are experiencing acute financial pressure
• The future feels uncertain or threatening
• Messaging relies on negative or fear-based framing

In such conditions, focusing on the future may increase pressure rather than support engagement.

Implications for pensions and later life planning

Patterns of work and retirement are changing.

Many individuals will:

• Change careers often multiple times, during midlife
• Continue working for longer, often in different ways
• Transition gradually into retirement rather than stopping at a fixed point

This is particularly relevant in the context of longer working lives, where individuals are navigating multiple career transitions and financial decisions over time.

Traditional planning approaches often assume a single pathway. In practice, individuals navigate a series of transitions over time.

Futures thinking offers a way to support this by helping people to:

• Understand how current decisions shape longer-term outcomes
• Explore different possible pathways
• Build confidence when making decisions under uncertainty

Futures thinking offers a way to support this by helping people to:

• Understand how current decisions shape longer-term outcomes

About this briefing paper

This page summarises insights from research by the Standard Life Centre for the Future of Retirement, developed in collaboration with Emily Shipp, a specialist in futures thinking and long-term decision-making.

The full briefing paper explores the evidence base in more detail and considers how these insights can be applied across financial services and careers support.