A report titled ‘The Future of Retirement – A balancing Act’ by HSBC reveals that India’s working population relies heavily on bank deposits and a second home to generate post retirement income.
88% of respondents in India say they were confident that bank deposits are a good option to generate income post retirement. Bank deposits are a popular instrument for generating retirement income in other countries too. In Indonesia, 82% respondents preferred bank deposits, USA (64%) and UK (56%), finds the study.
Sanjiv Sud, Head of Retail Banking and Wealth Management, HSBC India said, “The research shows, Indians are finally realising that they are not adequately saving for a comfortable retirement. The preferred means of cash deposits and income from second home, opted by Indians, alone may not deliver what they hope for.”
The survey covered 16,000 respondents (1,000 Indians) across 15 countries. The findings are based on an online poll commissioned by HSBC and conducted by Ipsos MORI.
Rajesh Hattangady of Thiink says, “People have been traditionally depositing money in banks. They consider it safer than any other product.”
“People must assess a variety of instruments beyond the traditional ones before choosing the right options,” added Sud.
Apart from bank deposits, insurance products (81%), personal pension schemes (80%) and employer pension schemes (76%) were some of the other options that Indians preferred for retirement income, shows the survey.
‘Life Events’ impacting the ability to save
The survey also showed that various life events are impacting the ability to save for retirement. 41% of Indians, along with Malaysia say that buying a home or paying for its mortgage adversely impacted their ability to save for retirement. This compares with global average of 32% and that of 28% in Brazil and 29% in Mexico.
The current economic downturn (22%), significant drop in earnings (20%), job loss (17%) and illness or accident (17%) are other key events which have impacted the ability of Indians to save for retirement, the report shows.
“Indians have always worried for their retirement savings. Children’s education and buying a home remain top priority for them. This affects their retirement corpus,” says Bhushan Mahajan of Arthbodh Investments.
