The chapters of this thesis analyse elements of households' consumption, labour supply and saving decisions within the life cycle framework. The focus is on three main issues arising in this context. The first considers modelling both a durable good (housing) and labour supply choices together with life cycle choices over consumption and sav ings. The importance of modelling these features together comes from the existence of explicit earnings-related borrowing constraints when taking out a mortgage. Empiri cal evidence is provided for the UK and the modelling exercise, although not aimed to reproduce the evidence of a single country, is calibrated to the UK. The second issue concerns incorporating expectations into the model. Two ap proaches axe followed in the different chapters. One approach infers expectations from past realisations. The alternative approach uses expectations elicited in survey inter views. The third issue relates to whether individuals save enough for their retirement. This question is addressed by using expectations on retirement outcomes, elicited directly in accordance with the approach mentioned above, and collected for a representative sample of the Italian working population. Data of interest to our exercise is for the years before and after a series of major pension reforms.