HYPOTHESIS 3: FINANCIAL ATTITUDE

The third hypothesis was written to explore if there is a significant difference in financial attitude among people who have VRS compared to those who have CRS and VRS compared to NRS.

This section begins by providing the results in the form of descriptive statistics and inferential statistics. An analysis of the findings then follows and then a conclusion to this hypothesis.

4.7.1 Hypothesis 3: Results

This section presents the financial behaviour findings to the analysis performed in the form of descriptive statistics (Table 4.7) and (Figure 4.5) and inferential statistics (Table 4.8).

Figure 4.5 below compares the overall financial attitude scores across the three retirement savings categories.

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Figure 4.5: Comparison of overall financial attitude across retirement savings categories Source: Researcher

Table 4.7 below compares the descriptive statistics of the three categories of retirement savings and Table 4.8 that follows shows the results of the univariate multinominal regressions (CRS vs. VRS and NRS vs. VRS) organised by each of the financial attitude characteristics and the overall financial attitude score.

Table 4.7: Description of financial attitude characteristics of the study participants by retirement savings category

VRS CRS NRS Total

N = 135 N = 128 N = 1 201 N = 1 464

N % N % N % N %

Satisfied with spending vs. Saving

Agrees 59 44% 54 42% 648 54% 761 52%

Disagrees 76 56% 74 58% 553 46% 703 48%

Tend to live for today

Agrees 38 28% 45 35% 514 43% 597 41%

Disagrees 97 72% 83 65% 687 57% 867 59%

Money is there to be spent

Agrees 67 50% 69 54% 733 61% 869 59%

Disagrees 68 50% 59 46% 468 39% 595 41%

Overall financial attitude

Low 84 62% 88 69% 885 74% 1 057 72%

High 51 38% 40 31% 316 26% 407 28%

SOURCE: STATA® 14 output

84 88 885 1 057 51 40 316 407 0% 20% 40% 60% 80% 100%

Voluntary savings Compulsory savings No savings Total low high

93 Table 4.8: Inferential statistics of the financial attitude characteristics

Compulsory vs. Voluntary No savings vs. Voluntary

Variable Coefficient Standard

error Relative Risk Ratio Standard error P Coefficient Standard error Relative Risk Ratio Standard error P

Satisfied with spending vs. saving

Agrees/neutral -.0618851 .2492771 .9399908 .2343182 0.804 .4117286 .1829169 1.509425 .2760992 0.024

_cons -.0266682 .1633138 .9736842 .1590161 0.87 1.984625 .1223365 7.276316 .8901588 <0.001

Tend to live for today

Agrees/neutral .3249457 .266262 1.383956 .3684948 0.222 .6470128 .2000654 1.909827 .3820904 0.001

_cons -.1558704 .1495241 .8556701 .1279433 0.297 1.957623 .108466 7.082474 7682079 <0.001

Money is there to be spent

Agrees/neutral .1713842 .2471298 1.186947 .2933299 0.488 .4634925 .1820227 1.589616 .2893462 0.011

_cons -.1419703 .1779186 .867647 .1543706 0.425 1.928961 .1297792 6.882353 .8931861 <0.001

Overall Financial Attitude

Low financial attitude .2894665 .2605307 1.335715 .3479947 0.267 .5308546 .1892276 1.700385 .3217598 0.005

_cons -.2429465 .2112057 .7843135 .1656515 0.25 1.823916 .1509053 6.196076 .9350205 <0.001

94 4.7.2 Hypothesis 3: Analysis

a. Descriptive statistics of the financial attitude variable

Similar to the financial knowledge and financial behaviour variables, the overall sample exhibited low financial attitudes (72%) (see Figure 4.5). In contrast to the other financial literacy indicators, financial attitudes were low across all retirement saving categories. The majority of the respondents with no form of retirement savings compared to the other two categories found it ‘more satisfying to spend money than to save it’ for the long term. Most participants across all three retirement savings categories disagreed with the statement that they tend to ‘live for today’ although they agreed with the statement of ‘money is there to be spent’.

b. Inferential statistics of the financial attitude variable (VRS vs. CRS)

This univariate analysis tested whether there is a significant difference in financial attitude for CRS relative to VRS. The results included the individual financial attitude statements and the overall financial attitude score. The overall financial attitude score, ‘high financial attitude’ was used as the reference group.

The study results show that there is no statistical significant difference in financial attitude among people who have VRS compared to those who have CRS. Shifts from high to low financial attitudes did not have a statistically significant impact on the relative probability of saving voluntarily or compulsorily (p = 0.27). Similarly, there were no observed statistically significant differences across the two groups with regards to the three financial behaviour components.

c. Inferential statistics of the financial attitude variable (VRS vs. NRS)

The results also show that there is a significant difference in financial attitudes between people who have VRS compared to those who have NRS. In addition, participants in the VRS group are likely to exhibit higher financial attitudes compared to participants without any retirement savings. This is supported by findings which show a 1.82 increase in the relative log odds of being in the NRS group rather than the VRS, when moving from the category of high to low financial attitudes. The relative probability of being in the no retirement savings group instead of the voluntary savings was 1.7 times higher for participants who exhibited low financial knowledge compared to those with high financial knowledge (RRR = 7.50, p <0.001). Similarly, statistically significant differences were also observed with regards to the three financial attitude components across the categories.

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All three negative financial attitudes of being satisfied with spending over saving, tending to live for today and considering money being there to be spent, were associated with over 50% increases in the expected risk of not having retirement savings compared to individuals with positive attitudes in the same areas.

4.7.3 Hypothesis 3: Conclusion

The results showed that there is no significant difference in financial attitude among people who have VRS compared to those who have CRS and NRS at all. Similar to the financial knowledge and financial behaviour variables, the overall sample exhibited low financial attitudes (72%) (Figure 4.5). In contrast to the other financial literacy indicators, financial attitudes were low across all retirement saving categories. The majority of the respondents with no form of retirement savings compared to the other two categories found it “more satisfying to spend money than to save it” for the long term. Most participants across all three retirement savings categories disagreed with the statement that they ‘tend to live for today’, although they agreed to the statement of ‘money is there to be spent’.