Indians underprepared to cope with retirement: Aviva

14 January 2008

Mumbai: Indians still believe in saving and investing regularly for their future, reports a trend analysis by life insurer Aviva, despite the steady growth in expenditure vis-à-vis savings over the last four years.

However, the research shows that 57 per cent of pre-retired Indians think that they will have to work beyond their normal retirement date to fund their retirement, a steady rise from 40 per cent in 2004 and 45 per cent of Indians still don't know where to seek financial advice. Just over a half admit that they don't really understand about "pensions, savings policies and things like that" even as the survey highlighted that making provision for family (protection and education) and healthcare are key concerns for Indians today.

The survey, titled Consumer Attitude towards Savings, displays that while Indian consumers still consider savings important, the booming economy has led to a steady increase in their spending over saving. Lack of good advice emerged a key deterrent to savings, along with perceived lack of choice, and of course, as around 20 per cent of the respondents put it, a lack of interest - more than twice the global average.

57 per cent of Indians are happy to have a short-term debt to allow them to have a higher spending power than their 40 per cent global counterparts. However, compared to other economies such as some Southern European countries and Russia, India still continues to be favourably inclined towards savings. The study surveyed representative samples in key metros - Delhi, Mumbai, Kolkata, Chennai and Bangalore.

Aviva partnered with strategic research consultancy Henley Centre Headlight Vision, to conduct this annual global survey, which polled 80,000 people over four years in 24 countries, in 2007. India has been a part of this survey since it was first carried out in 2004.

Speaking at the launch Bert Paterson, managing director and CEO, Aviva India, stated, "It is heartening to find that Indians continue to save, keeping the future in mind. While there might be an abrasion in the near term, over a longer term horizon savings does play a very important part in their lifestyle. However, it is important to note that while savings is important, retirement planning is a serious issue. Our research highlights that while Indian consider investment in property and our savings tools, structured investments in retirement is not yet being given due consideration."