- Home
- Publications
- The Influence Of Decision Costs On Investments In Individual Savings Accounts
The influence of decision costs on investments in Individual Savings Accounts
This study considers the efficacy of a tax incentivised savings scheme in context of decision making rigidities. Analysis is based on a classical life-cycle model of savings and investment decisions, augmented with a salience cost over participation in Individual Savings Accounts (ISAs) currently run in the UK. Calibration results indicate that salience costs help to match the model to observed rates of participation in ISAs. The calibrated model suggests that the price effects of ISAs are insufficient to generate appreciable increases in private sector savings, with or without salience costs. In this context, salience costs have an important influence on the distribution of welfare bene fits that are delivered by the ISAs scheme.
Related Blog Posts
Breaking Down the Different Types of Pension in the UK
Robyn Smith
Adrian Pabst
25 Mar 2024
6 min read
What Are the Implications of the Rising National Minimum Wage and National Living Wage Rates?
Ekaterina Aleynikova
Adrian Pabst
19 Mar 2024
5 min read
How Changes in Migration Policy Could Boost Scotland’s Economy
Max Mosley
Ekaterina Aleynikova
18 Dec 2023
3 min read
Related Projects
Related News
Press Release: Compositional effects push up average weekly earnings at the end of 2020
26 Jan 2021
2 min read
Press Release: 2020 shaping up to be the worst year for total pay growth since 2009
15 Dec 2020
2 min read
Related Publications
The Nature of the Inflationary Surprise in Europe and the USA
21 Mar 2024
Discussion Papers
Pay-Setting Among Employers in the Agriculture, Cleaning, Hospitality and Retail Sectors
11 Mar 2024
Research Report
Energy and Climate Policy in a DSGE Model of the United Kingdom
08 Mar 2024
Discussion Papers
Job Boom or Job Bust? The Effect of the Pandemic on Actual and Measured Job and Employment Growth
07 Feb 2024
UK Economic Outlook Box Analysis