‘Don’t play if you can’t win’: household disengagement in the Australian pension system

ABSTRACT Drawing on the literature on political alienation and insider/outsider theory, this paper offers a novel explanation for the failure of some households to embrace the opportunities for financial control offered by the pension system. The analysis uses data from a financial diaries study to construct objective and subjective measures of attitudes, engagement and distributional outcomes for individual households in the Australian pension system. By showing that households that are systematically disadvantaged in the pension system not only are much more likely to be disengaged but have much stronger convictions about unfairness in the system, the findings link disengagement to alienation. The analysis thus proposes that some households reject the system of individualised accounts by disengaging – like ‘outsiders’ reject the political system by abstaining from voting – because they see the system as stacked against them. Drawing on the alienation literature’s analysis of disengagement with political responsibilities of citizenship, the article thus extends the analysis of disengagement to newer financial responsibilities of citizenship.