Maslow’s pyramid. Pensions don’t fit.
Anyone who has studied A-Level psychology will be familiar with Maslow’s Hierarchy of Needs.
It sets out how human motivation progresses from fundamental physiological needs like food and shelter, to high-level needs like personal growth.
The theory goes that without a solid base, it’s difficult for us humans to reach the peak of the pyramid.
But more recent research suggests:
We don’t always meet the needs in a strict and progressive order,
Our needs shift over time and can influence our behaviours, and
Even when our basic needs are disrupted, higher-level needs remain important.
It might explain why it doesn’t always seem to work in the world of pensions, where:
Members are expected to practice abstract “self-actualisation” early on, making choices with long-term vision, discipline and purpose,
They may prioritise their “social and esteem” needs today over their long-term security, and
Human psychology processes current and future “safety” differently.
And that’s why a blend of behavioural science (human behaviour) and behavioural economics (human decision-making) is likely to be the most effective route to support members to reach the financial future they want and deserve.
Read the article: https://www.verywellmind.com/what-is-maslows-hierarchy-of-needs-4136760
