Policy guidelines to improve the design of financial incentives to promote savings for retirement

Abstract

All countries provide financial incentives to promote savings for retirement in the form of tax incentives or non-tax incentives (matching contributions or fixed nominal subsidies). These incentives provide an overall tax advantage to individuals by reducing the amount of personal income tax they have to pay when saving in private pension arrangements as opposed to other savings vehicles. This tax advantage entails a fiscal cost. Governments therefore need to make sure those incentives are an effective tool for promoting savings for retirement. Financial Incentives and Retirement Savings provides guidelines to improve the design of financial incentives.