Cash deposits, second home emerge as top sources of retirement income in India
19 January 2015
India's working population relies heavily on cash deposits and second domestic property to generate post-retirement income, according to HSBC's latest report, The Future of Retirement: A balancing act.
The report also shows, working people in India believe that buying a house and paying for children's education were the top two factors, which have significantly impacted their ability to save for retirement.
The report represents the views of more than 16,000 people in 15 countries and territories worldwide with 1,000 respondents from India. The findings are based on an online poll conducted by Ipsos MORI in August and September 2014.
In all 88 per cent of respondents in India, also the highest proportion amongst the polled countries, said they were confident that cash deposits in the banks or trusts were a good option to generate income for retirement. In Indonesia, 82 per cent preferred cash deposits while the figure is 64 per cent in the USA and 56 per cent for UK, according to the report.
The proportion of Indians who are confident of second domestic property working as source of retirement income is 85 per cent, behind that of Indonesia (90 per cent) but ahead of USA (54 per cent) and UK (60 per cent).
Insurance products (81 per cent), personal pension schemes (80 per cent) and employer pension schemes (76 per cent) are some of the other popular ways Indians prefer for retirement income.
Sanjiv Sud, head of retail banking and wealth management, HSBC India, says, ''Our 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.''
He adds, ''People must assess a variety of instruments beyond the traditional ones before choosing the right options. At HSBC, we provide clients need-based advice to generate long-term retirement savings using an array of customised products and services.''
The HSBC survey shows, living comfortably during retirement is a real concern for many working Indians. Almost three quarters (74 per cent) of pre-retirees are concerned about having enough money to live comfortably in retirement. For women, this figure rises to 79 per cent, compared with 71 per cent of men.
India has the highest proportion (88 per cent) of people in the world who prefer cash deposits for retirement income, says HSBC report
74 per cent of working Indians are concerned about having enough money for a comfortable retired life
Buying a home has impacted the retirement saving abilities of 41 per cent Indians.