IFS analysis for the Pensions Commission uses ELSA data to highlight how life course patterns shape pension saving

Employment histories, caring responsibilities, and periods out of the labour market can have a lasting effect on pension saving and financial security in later life, according to new IFS analysis, commissioned for the government’s Pensions Commission and drawing on ELSA’s longitudinal and life history data. The analysis highlights how pension outcomes are shaped across the life course, with women, self-employed workers, and people with interrupted working patterns facing greater risks of inadequate retirement income.

A new report commissioned by the Department for Work and Pensions for the Pensions Commission has examined how people’s employment and family trajectories influence pension saving and retirement outcomes over time. The analysis, carried out by the Institute for Fiscal Studies, uses longitudinal and life history survey data, including ELSA, to track how working lives translate into pension wealth in later life.

The findings show that differences in pension saving are closely tied to life course experiences rather than decisions made at a single point in time. Periods spent out of paid work, part-time employment, caring responsibilities and self-employment were all associated with lower pension accumulation.

In particular, the analysis also points to persistent gender inequalities in pension wealth. Women approaching retirement typically have substantially lower private pension savings than men, reflecting differences in earnings, employment patterns, and caring responsibilities over the life course.

Longitudinal studies such as ELSA are particularly valuable for this kind of research because they allow researchers to follow people over many years and examine how experiences accumulate across adulthood and into later life. ELSA’s life history questionnaires are also especially important for understanding how life course patterns earlier in life translate to outcomes in retirement. Cross-sectional data can show differences in pension saving at one point in time, but they cannot fully explain how those differences emerge.

The IFS analysis forms part of the evidence base for the revived Pensions Commission, launched by the government in July 2025. The Commission has warned that millions of people across the UK are at risk of inadequate retirement income – the Commission’s interim report highlights concerns that as many as 15 million people are not saving enough for retirement.

Previous ELSA research also informs the Pensions Commission

In addition to the newly commissioned research, the Pensions Commission’s interim report also draws on other recent research using ELSA data.

The Commission highlights the importance of making sure that older workers can remain in paid work when possible, as this helps them delay drawing on their pension wealth and allows them more time to accumulate wealth. Recent IFS research using ELSA is drawn on to highlight key issues in this area, including patterns of retirement among older workers and how those differ by wealth and health. ELSA’s longitudinal dataset with information on employment, household characteristics, health and wealth is uniquely well placed to support this analysis.

The Commission also discusses the risks of cognitive decline for older people managing pension pots that have not been converted to a guaranteed income product. Indeed, evidence from research using ELSA data suggests that cognitive decline can affect financial decision-making and financial security in retirement.

Together, the new IFS analysis and the wider evidence cited by the Pensions Commission underline how later-life financial security is shaped by the accumulation of work, family and health experiences across adulthood. Longitudinal studies like ELSA will continue to be essential for understanding these patterns and for informing policy responses to the challenges the Commission has set out to address.

Department for Work and Pensions (2026) Life courses and pension saving patterns. London: Department for Work and Pensions. Available at: https://www.gov.uk/government/publications/life-courses-and-pension-saving-patterns

Photo by Centre for Ageing Better