This research project aims to address the core market need of individuals seeking financial independence and planning for their retirement. In aging societies worldwide, many individuals struggle with their pension planning or are hesitant to act and improve financial preparedness in retirement. For instance, 30% of European households are projected to have insufficient pensions (Knoef et al., 2016). Consequently, citizens face financial challenges, leading to higher material hardship and psychological distress that may translate into societal tensions (Dakin & Wampler, 2008). An effective strategy to tackle the challenges is lacking. These individuals thus have unmet functional needs and goals, including financial advice tailored to their lifestyle and values and effective nudges to act and enhance their financial security and independence in retirement. They may also seek a more engaging, interactive, and self-determined way to plan their finances and achieve financial security. This project aims to address this pivotal societal need.

This project proposes to employ a state-of-the-art data-driven pension education app to run randomized field experiments that integrate novel insights from CUHK decision-science researchers. The results will inform industry and policymakers on how to help households achieve financial independence. The app was built to provide realistic financial profiles enabling users to simulate pension choices, evaluate their impact on their pension gap, browse through life events, and customize the digital peer's data to match their own situation. It provides users with an overview of their financial future. The project team will conduct a randomized field experiment aiming to increase learning and active financial planning using an information nudge.

This advice template will nudge individuals to identify vital factors in achieving financial independence and to prioritize their goals. By integrating these insights, individuals will gain confidence in their decision-making process and be encouraged to follow "their own" advice, overcoming procrastination when making forward-looking financial decisions. Finally, the self-advised data from the field experiment will inform the methods for improving financial literacy by understanding how individuals prioritize their goals and identify vital factors in achieving financial independence.

500 employees of industry partners.

2024

FinTech