A person’s attitude towards money may matter more than their personality when it comes to protecting retirement savings, according to new research published in the Journal of Consumer Behaviour. The study, which examined how psychological traits influence early pension withdrawal, found that a cautious, prudent approach to money was the single strongest predictor of whether someone dipped into their pension pot before retirement.
The research drew on responses from more than 5,000 members of a South African retirement fund following the introduction of the country’s “Two-Pot” pension system in September 2024. Under this system, workers can access a portion of their savings before retirement while the remainder is protected. Although the scheme was designed to help people in genuine financial distress, the data revealed that higher earners were frequently making early withdrawals for discretionary spending such as home improvements, not emergencies.
Researchers from Stellenbosch University and Momentum Investments used structural equation modelling to test how personality traits and money attitudes shaped withdrawal behaviour. They measured two key personality dimensions, conscientiousness and composure (broadly the opposite of neuroticism), alongside two money attitudes: Money Prudence, which reflects careful and deliberate financial planning, and Money Anxiety, which captures worry and unease about finances.
Money Prudence emerged as the dominant protective factor. People who scored highly on this attitude were significantly less likely to make an early withdrawal, regardless of their personality. The effect was substantially larger than that of conscientiousness, which also reduced withdrawal likelihood but only modestly by comparison. This suggests that targeted financial planning behaviours may offer more protection against impulsive pension access than broad personality dispositions alone.
One of the more unexpected findings concerned emotional composure. More emotionally stable individuals were actually more likely to withdraw early, particularly when they also scored highly on Money Prudence. The researchers suggested this could reflect a greater sense of confidence in navigating the withdrawal process, or a reduced perception of the risks involved. This counterintuitive result challenges the assumption that emotional stability always leads to more cautious financial decision-making.
Money Anxiety, meanwhile, had a direct positive association with early withdrawal, meaning that more financially anxious individuals were more prone to accessing their pension savings. However, it did not appear to amplify or weaken the effect of personality on withdrawal decisions, suggesting it operates as an independent risk factor rather than a moderating one.
The findings carry practical implications for pension funds and financial services providers. The authors argue that retirement funds should consider incorporating money attitude assessments to identify members at higher risk of premature withdrawal. Interventions focused on strengthening financial planning habits, such as goal visualisation, commitment devices and proactive member communications, could prove more effective than approaches based on personality profiling alone.
The study’s cross-sectional design means causal conclusions remain limited, and the researchers call for longitudinal work to determine whether these patterns persist once the new pension system becomes more familiar.