40 per cent of urban Indians save money for unexpected hardships: Study

Prashasti Awasthi Mumbai | Updated on February 24, 2021

YouGov, a British international Internet-based market research, carried out a study that revealed two in five urban Indians (40 per cent) consider saving money for unexpected hardships as their top financial priority in 2021.

For the study titled “On the Money: YouGov’s Global Banking and Finance report 2021”, You Gov tracked data to analyze financial attitudes, preferences and habits in 17 global markets.

The official release stated that apart from saving, a little over a third (35 per cent) of urban Indians want to ensure they protect themselves and their families in case of emergencies. While 27 per cent look forward to fulfilling their regular financial commitments in the New Year.

Comparatively, paying off debts and accumulating money for retirement are at a lower priority for Indians this year- at 22 per cent. Furthermore, a quarter of urban Indians (25 per cent) are likely to make money by investing it in 2021.

Apart from the bigger financial targets, investment is a big priority for Asian countries such as Indonesia (37 per cent) and Hong Kong (38 per cent), Singapore (29 per cent) and China (28 per cent).

Buying a home is not a top priority in most of the surveyed markets, but in India one in seven (14 per cent) plan to purchase a home or property this year.

The importance of purchasing assets (such as car, furniture, etc.,) is also high in India (15 per cent), along with China (18 per cent) and Denmark (16 per cent), as compared to the rest of the world.

The study suggested that returning to pre-pandemic spending habits is more of a priority in many European nations. However, in India, less than one in ten (9 per cent) consider it important, notably because saving seems to be the main goal this year.

When asked about their household situation in the last six months, almost half of urban Indians (49 per cent) said they have been actively reducing non-essential expenses during this period. Nearly a third have ‘saved more’ (32 per cent) or ‘relied more on savings for expenses’ (31 per cent). A fifth (21 per cent) claim to have taken on more debt to cover expenses.

The study revealed that people are likely to continue restricting non-essential spending in the future as well, with more than three-quarters of urban Indians (77 per cent) not preferring non-essential spending.

The paper also elaborated on the public perspective towards cash and payment technology. India ranks among the top countries where people said they use contactless payment wherever possible ( 73 per cent). However, two in five (39 per cent) prefer to pay by cash.

Deepa Bhatia of YouGov, said: “The coronavirus pandemic has disrupted people’s lives in many ways, including their personal financial situation. The data shows at present urban Indians’ financial priorities are focused on home and family. They appear to be more interested in saving for unforeseen hardships and less likely to revert to pre pandemic spending habits or accumulate new debt obligations.”

He added: “As consumers are still dealing with the uncertainties of the pandemic, banks and financial service providers must come up with innovative offerings based on people’s current priorities and behaviours to make them feel more secure about their financial future.”

Published on February 24, 2021

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