Why do people struggle to save?
Despite the number of tools and products available, many consumers fail to engage meaningfully with savings. Confusion, inertia, and low trust play a major role. Recent research in the JCR, The Benefit and Maleficent Effects of Simplification on Retirement Savings by Avni M Shah, et al, 2025, explores how simplifying retirement savings information can shape user behaviour – and reveals a striking paradox.
Before going on however, it’s important to acknowledge that struggling to save is not only about behaviour change. For many people, saving is financially out of reach. Low or unstable incomes, high living costs, and unexpected expenses mean some consumers have little to no disposable income left to set aside.
The paradox of simplification
For those that can save, the key theme in the research is how simplifying information, especially about retirement saving plans, can have both positive and negative effects on behaviour. Simplification is intended to make it easier for people to understand, remember, and act on complex information.
When simplification helps individuals better recall positive information, such as high-performing fund rankings, it can be beneficial: people become more likely to make or increase voluntary contributions to savings.
However, the same simplification process may also make negative information, such as low fund rankings, easier to remember. In that case, simplification could discourage contributions, since people recall the downside more saliently.
This leads to the paradox of dual outcomes, as simplification is double-edged. It can boost saving behaviour if it enhances recall of positive ranking but can depress contributions if the negative aspects become more memorable.
Simplification alone isn’t enough
Sometimes we assume simplification mainly aids memory, helping users recall fund rankings more easily. But that’s just one piece of the puzzle.
In reality, simplification affects:
• Cognitive load (Can I handle this?)
• Emotional response (Do I feel safe to invest in this?)
• Trust in the provider
• Decision speed (Is this intuitive?)
When online platforms fail to address these deeper layers, even well-simplified information can fall flat. The question of long-term impact is important: whether any behaviour change lasts.
Why simplification isn’t always simple
While simplification is meant to help, it can mislead by shifting focus to the wrong things. A low fund ranking may stick in people’s minds more than the long-term benefits of saving, leading to avoidance rather than action.
It also heightens emotional responses – a red warning or low score might trigger anxiety, especially for first-time savers. This can result in overreaction or total disengagement.
Finally, stripped-down info can reduce trust. Without context, consumers may suspect something’s missing, especially in finance, where distrust runs high. Clearer isn’t always better if it sacrifices relevance, nuance, or reassurance.
Consumers still don’t understand their options
However, there are alternatives to just relying on memory. Smart saving platforms like Plum and Raisin offer automated, simplified saving with minimum effort, echoing the importance of user experience and outcomes. Significantly, in addition to this SIPP platforms are segmented into robo-manged (low-touch portfolios via risk profiling) or DIY/flat-fee providers, each offering different levels of control and cost clarity, much like positive versus negative information framing.
Fintech apps like Snoop and Moneybox aim to simplify saving with automation, spending insights, and goal-based nudges. Snoop uses open banking to spot spare cash, while Moneybox rounds up spending to grow ISAs and pensions. In the U.S., Betterment and Wealthfront automate investing and retirement planning, managing portfolios with minimal effort.
Yet simplification doesn’t always lead to clarity. Many users feel confused by fees, risk levels, or how to access their money, even with intuitive apps. Some drop off not because the tools aren’t good, but because they don’t fully understand or trust them.
Meanwhile, Klarna and Affirm have made spending seamless with Buy Now, Pay Later features—encouraging immediate consumption over long-term saving. Their success shows how powerful good UX can be, but also how behavioural design can work against financial resilience.
All of this points to the same conclusion: tech can help, but only if it’s built on real insight into consumer behaviour.
The impact of consumer inertia
Behavioural economics has long shown that people are not rational financial actors. Simplified information may improve recall — but that doesn’t mean people act.
Common barriers include:
• Procrastination and loss aversion
• Distrust of digital or “new” providers
• Fear of locking money away
• Not understanding the differences between ISAs, SIPPs, or general savings.
This is why people often leave money sitting in low-interest current accounts — even when higher-yield options are available and accessible.
Rachel Reeves’ push to get consumers investing in shares
The UK Government, led by Chancellor Rachel Reeves, has discussed encouraging savers to move from low-interest cash holdings into stocks and shares investment. In a major regulatory overhaul known as the Leeds Reforms, Reeves announced that retail banks will be permitted to notify customers with cash savings about potential investment opportunities—intended to nudge lifelong cash savers into owning equities.
At the annual Mansion House speech, Reeves stated that “For too long, we have presented investment in too negative a light—quick to warn people of the risks, without giving proper weight to the benefits”, also confirming upcoming support via the FCA aimed at improving accessibility for novice investors.
Reeves’ reforms shift from risk-heavy messaging to a more positive, reward-focused approach to investing, aimed at tackling consumer inertia and mistrust. Backed by an ad campaign and bank-led nudges, the goal is to move savers out of cash ISAs and into shares. The message is clear: how choices are framed shapes behaviour, and better design can unlock better financial decisions.
Consumers need help – not just options
All of this underscores a bigger problem: consumers are not being researched enough.
Providers and regulators often design savings products with technical accuracy, but not user insight. They simplify tables, not behaviours. They publish rates, not clarity. What’s missing is:
• Research on how different consumer groups (e.g. young adults, renters, SMEs) interact with savings products
• Insight into emotional and behavioural barriers to saving
• Evaluation of real-world responses to simplification and framing.
This is where user research and behavioural insight matter. By understanding how real people think, hesitate, and decide, we can help financial services build systems that don’t just inform — they enable.
Conclusion
Simplification isn’t the goal – action is. The research from Shah et al on simplification in retirement savings captures a real tension: better presentation doesn’t always lead to better outcomes. It can help, but without behavioural insight, it can also backfire.
Our view? To close the savings gap, providers need to:
• Recognise consumer inertia as a design challenge
• Stop assuming financial literacy is the barrier — and start studying decision environments
• Invest in research with consumers and SMEs to find out what really blocks saving behaviour.
Because ultimately, helping people save isn’t about memory – it’s about momentum. And that starts with understanding.
With Naomi Waheed.