Indians not saving for retirement as current expenses rise, finds survey

Our Bureau Mumbai | Updated on October 20, 2020

Retirement planning not a priority for Indians, who still are anxious about their future and worry about cost of living

With the rise of home loans, unsecured loans and credit cards, Indians are saving and investing less, and focussing more on current expenses rather than saving and planning for the future.

A retirement survey commissioned by PGIM India Mutual Fund revealed that India as a country of savers may be outdated and the conventional model of stable employment with retirement by 60 is becoming increasingly difficult.

Urban Indians are saving and investing less, allocating nearly 59 per cent of income to current expenses, and most of them do not have a retirement fund, said the study conducted by Nielsen for PGIM India.

Ajit Menon, CEO, PGIM India Mutual Fund, said one can get a loan for everything — from higher education, house and car, to starting a business — but not for retirement.

“We felt the need to study the decision-making processes around retirement savings and the level of awareness on this financial goal, given that the number of the aged is set to increase in the coming years in India,” he added.

Products such as reverse mortgage have not seen acceptance. The study indicated that retirement planning is not a top priority for Indians and, therefore, it is already a point of concern.

Financial uncertainty

Given the current economic challenges emerging in the wake of the Covid-19 pandemic, the need for future financial security or financial freedom is even more pertinent today, Menon said.

Even though retirement is not a priority, Indians are more anxious about their future and worry about the cost of living, healthcare issues and the lack of family support in the future, the study revealed.

On average, urban Indians aim to gather a corpus of about ₹50 lakh. About 39 per cent of Indians say they have no trusted advisor to guide their retirement planning as one of the concerns related to retirement.

Published on October 20, 2020

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