This is present bias
Present bias means that people tend to prioritize short-term benefits over benefits in the distant future. Simply put, we’re more likely to choose to receive €10 today than €15 in a month. We prefer to choose something that feels more pleasant or important now, like a vacation or a new phone, over something you won’t enjoy or benefit from for another thirty years, like your pension.
Present bias as an obstacle to pension awareness
Present bias hinders pension-aware behavior because people tend to underestimate the future and overvalue the present. This is understandable in a way: the future feels abstract and intangible, while the here and now is tangible. The further away an event takes place, the less we (want to) consider it. And since retirement is still a long way off for many people, the problem of present bias for pension awareness is clear. Present bias causes people to prefer spending money now rather than saving for later, to view retirement as a distant prospect, and to postpone taking action on it.
The figures speak for themselves.
Research also confirms this. The September 2025 Pension Monitor (Ministry of Social Affairs and Employment) shows that only a third of the working population opens (and reads) all the letters and emails they receive from their pension fund. This is despite the fact that a third of the working population expects that they will not have sufficient income after retirement to maintain their current lifestyle. The public monitor also shows that approximately half of Dutch people under 55 know little to nothing about the changes in the new Pension Act that took effect a year ago. Nearly three-quarters of all respondents do not expect to manage their pensions differently in the future than they do now. As a result, people may have less to spend after retirement than they would like.
Bringing the future into the here and now
So: how do you overcome this present bias? If people don’t want to dwell on the distant future, the trick for pension funds is to bring that future into the present. For example, by making the future tangible. Indicate what a participant will have to spend each month, rather than just a total pension amount. This monthly amount is easily compared to someone’s current income. This immediately appeals to the imagination. Another effective way to combat present bias is sending well-timed reminders, for example, for a pay raise or a move. By activating people at the right moment, pension funds can seize a moment in the here and now when people are open to making financial choices.
Making the future personal and tangible
Making the future tangible can also be done in a tangible and personal way. Consider the use of so-called AI Face Aging apps. These apps show participants photos of themselves in their later years. Interestingly, this generates sympathy in people for their older selves. This way, you not only bridge the gap in time (you see what you’ll look like in the future), but you can also identify with it. By showing people what their older selves look like or feel like, you weaken the psychological distance and strengthen the motivation to take action for the moment when they look like that. That could just be the nudge you need to start thinking about your retirement.
Avoiding Present Bias
Another option is to “bypass” present bias. We’re seeing this application in other sectors as well. For example, HelloFresh uses subscriptions with automatic delivery and flexibility. Customers automatically receive meal boxes, with the option to schedule breaks or change them. Once you’ve subscribed, you don’t have to think about it anymore, because the meal boxes are delivered automatically. This way, HelloFresh reduces the chance that customers will postpone or forget about ordering. The convenience customers experience ensures that they continue using the meal boxes and don’t fall back into other, old meal preparation habits. When building up supplementary pension, it can also work this way. For example, by automatically having participants save a little extra for a supplementary pension, preventing them from having to make many choices now. Or by choosing smart defaults for risk profiles that vary by target group. Of course, you do need to consider which options are most suitable for which target groups.
It’s possible!
Present bias means we’d rather do something fun today than something sensible tomorrow. But there’s definitely something we can do about it. With smart communication (moments), applied psychology, and technology, pension funds can break this human tendency in various ways. And above all, borrow from what works in other sectors, make it more fun and easier!
