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Neuroscience study shines light on future fears

Ground breaking neuroscience study confirms that many people feel anxious when they think about saving for their future, but when we do save, we feel happier.

Positive and helpful communication about long term saving stimulates dopamine and can in turn encourage the “love hormone” oxytocin. Together these can make us feel less anxious, happier and more likely to engage positively with saving. People who take control of their savings and check their finances monthly are ten times more confident about their financial future than those who do not.

Standard Life today publishes Saving in Mind, believed to be the first research of its kind in the UK to use neuroimaging to delve into the emotions associated with saving for the future. The ground breaking research shows, for the first time, the importance of understanding emotion for the saving sector when it comes to communication and helping customers to take positive action and feel more confident and optimistic about their future. It was revealed that when many people think about money and their future, they start to feel anxious – which is a challenging starting point. But when people do save, they can feel more confident, optimistic and calmer too. It was also discovered that positively toned communication about saving, that includes simple guidance, can significantly change the way we feel.

The research, conducted by neuroscience research agency Mindlab and appraised by Cognitive Neuroscientist Dr Lynda Shaw, used both electroencephalography (EEG) techniques within a lab environment and a benchmarking questionnaire to assess the relationship between savings and emotions. It was found that presenting information about retirement in a positive tone, highlighting practical steps for finding out more information or taking action could help people to feel more motivated and positive about the future. Conversely, adopting a negative tone – or fear factor – was least likely to help people, particularly where guidance on what to do next was not included.

Findings also suggest that positively toned and helpful communications about long term savings stimulate the hormone dopamine which can make us feel less anxious. It can also lead to greater engagement with our money when thinking about our family’s future and encourage oxytocin, also known as ‘the love hormone’, which can make us feel much happier too.

Stephen Ingledew, Managing Director, Customer & Marketing at Standard Life, said: “We recognised some time ago that if we are to support people as best we can and help them save for their future, we really needed to understand their emotions. Insights from psychology and behavioural economics tell us that the decisions people make are not always rational, and that emotions play an important role. This is something that other sectors, such as retail, understand and have been researching for some time. Yet, when we searched for specific insight into the psychology of saving for the future, we discovered that very little research has been done. So Standard Life has carried out this research to help close the gap.”

“We now know that people can feel all kinds of emotions when they think about saving for the future, from anxiety and hopelessness, to optimism and security, and how they approach their savings is an important factor. We also have compelling evidence that the right communications can help to change the way we feel. The future of savings communication should be personal and positive, not nebulous and negative. The results show that positive communication with guidance on what to do next help people feel more motivated and able to take action. In turn, when considering our family’s welfare, it can also stimulate the love hormone oxytocin which actually makes us feel good.”

The pioneering study reveals that of those who take control and check their finances every month, almost half (47.3 percent) feel confident about their financial future [Fig1]. However, of those who never check their finances, a meagre 3.6 percent feel confident.

Those who save are significantly more optimistic, calm, hopeful and confident about their future finances than those who do not save for the future [Fig 2]. They are also far less anxious, insecure and pessimistic. For example, more than half of people (57 percent) saving for the future feel optimistic, compared to just one in five (20 percent) of those who are not saving for the future. Conversely, only a quarter (25 percent) of savers felt pessimistic compared to 44 percent of non-savers. Cognitive Neuroscientist, Dr Lynda Shaw said: “The results of this study also showed that just offering savings guidance – simple steps as to what to do next – regardless of emotional tone, did in fact increase participant’s intention to save. This is highly relevant. We live in an age of information saturation. At the press of a button we can access an incredible amount of information that is both overwhelming and confusing. It can be argued that guidance on what to do next not only promotes curiosity and interest, but also simplifies. It helps people feel confident to make that next step.”

Stephen Ingledew concluded: “We believe that growing our understanding of emotions will improve how we talk to people about savings, which in turn will help them feel more able to take action and achieve their future aspirations, and mean they feel happier too. This research is just the start of understanding these emotional dynamics. We hope it will become a catalyst for researchers, policy makers and the rest of our industry to delve more deeply into the emotional aspects of saving for the future, to share insights and act on them.”

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