The Impact of Locus of Control on Voluntary Retirement Savings—Evidence for Switzerland

ABSTRACT This study examines determinants of voluntary, tax‐privileged retirement savings in Switzerland by analyzing voluntary participation in so called Pillar 3a accounts. Using longitudinal data from the nationally representative Swiss Household Panel, we assess how locus of control, financial conditions of a person, and tax incentives shape households' saving behavior. Logistic regressions and a generalized structural equation model indicate that financial conditions are the dominant predictors of participation. Contrary to prior evidence on general financial behavior, internal LoC does not show a robust significant effect, whereas external LoC is associated with a small but statistically significant reduction in the likelihood of holding Pillar 3a savings. Income emerges as the key driver of participation and is not meaningfully mediated by Locus of Control. The study contributes to interdisciplinary personal finance research by integrating economic, financial‐planning, and psychological perspectives and by closing a gap in the literature on LoC and tax‐privileged retirement saving.