Correspondence: Orla Gough, Westminster Business School, University of Westminster, 35 Marylebone Road, London NW1 5LS, UK. Tel: +44 (0) 207 911 5000 ext. 3012; E-mail: gougho@wmin.ac.uk

¹has a PhD in Pensions, she is the Head of the Finance and Business Law Department at the Westminster Business School and the Director of the Pension Investment Academy. Orla has published numerous articles and has wide experience of pension matters.

²is a senior lecturer in Finance at the University of Westminster and a visiting lecturer at the University of Bologna. She was formerly a Financial Analyst at Citibank and Tokai Bank, Europe. Roberta has spoken at numerous conferences and contributed many articles to the pensions press.

³is a lecturer in macroeconomics and microeconomics at the University of Westminster. He was formerly a researcher at the University's Business School, and currently researches on economic growth. He holds degrees from the Universities of Bradford and Cambridge.

Received 20 June 2008; Revised 20 June 2008.

Abstract

Governments of many Western countries are committed to render the pension system sustainable in the long term. We study the links between pension reforms, retirement age, income and retirement decisions by examining data from two nationwide surveys in Italy and the UK. While the Italian system remains centred on state pension, the UK places greater emphasis on private savings and on the increase of retirement age. Our analysis of the differences in retirement decisions between the UK and Italy over a ten-year period (1992–2002) allows us to determine the effective retirement ages and reveal a greater volatility in the average Italian retirement age compared to the UK. By investigating the relationship between income and retirement age, we conclude that, in both countries, high earners retire relatively early, while those in the lowest income groups tend to retire later; however, there are marked differences in the way our two samples behave over the period studied.