Only one in three Indians saves for retirement: HSBC StudyAs much as 56 per cent of people live on a day-to-day basis financially. A 69 per cent will continue working to some degree after they retire. These are some of the shocking revelations brought out by an HSBC study. Only a third of people in India are regularly saving for their retirement, a new international report by HSBC reveals. This means that 2 out of 3 people are still not saving for retirement, and setting the stage for financial dependence on others.


According to The Future of Retirement: Bridging the Gap study, just 33 per cent of working-age people globally are regularly putting anything aside for their later life – and only a 19 per cent of working age people are saving for future nursing or care home fees. This is despite a half (51 per cent) claiming to be concerned about affording residential care when in retirement. This is despite the World Health Organisation (WHO) global average life expectancy increasing by 5.5 years between 2000 and 2016, to 72.0 years (74.2 years for females and 69.8 years for males), the fastest increase since the 1960s.

The lack of saving is likely linked to low knowledge of how much money is needed in retirement, as well as many prioritising their immediate financial situation over planning for their older years.

Over half of working-age people (56%) are living on a day-to-day basis financially, while a further 53% only save for short-term goals. Almost half (45%) also admit they prefer spending on enjoying today rather than saving for tomorrow, HSBC’s research finds.

The lack of saving may also be linked to many people not considering their older years as ‘retirement’ at all, with over two-thirds of working-age people (69 per cent) predicting they will continue working to some extent and more than half (54 per cent) hoping to start a business or new venture.

When it comes to knowing how much money they will need in retirement, almost two-thirds (65%) of working-age people are aware of the cost of typical residential home fees. Fewer still know how much they would need to pay for other options, such as home social care (51 per cent)

Banking on son and daughter

Many across India anticipate help from their family network. Over two thirds (68%) of working age people expect their children will support them at some point in their retirement. Evidence from current retirees suggests these expectations are not met in reality, with only 30% receiving financial support from their children.

A two-stage retirement is becoming increasingly common as life expectancies rise, the study finds. An initial retirement period, usually involving relative good health, often lasts a decade or more and is generally followed by a shorter, less active time.

HSBC’s report finds that this is leading a generally positive view of retirement across the globe. Most working-age people are looking forward to greater freedom away from the nine-to-five (76%), taking up new hobbies and interests (72%) and getting fit (68%).

Ramakrishnan S, Head of Retail Banking and Wealth Management, HSBC India says: “For many, retirement is thankfully no longer a short period tacked on to the end of our life. It can be a long and very fulfilling part of a person’s life. But with that, our needs at 65 can be very different from our needs at 75 or 85, with very different financial implications.”

We know it can be hard to make ends meet today and also save for tomorrow. “But recognising the costs of ageing, and making plans for them sooner rather than later, is the first step towards a rewarding older life. So make a promise to yourself today to start saving for your older years,” Ramakrishnan adds.

Top tips for a better retirement

It is important to rethink your retirement plan.

1. Reframe how you think about retirement – It’s easy to put off planning your retirement so reframing how you view it is important. Think of it as a chance to pursue your passions and have new adventures. Make sure you make the most of it by planning ahead. You will need money and probably lots of it. So, start saving and investing while you still can.

2. Imagine the retirement you want – Think about the kind of retirement you want. Do you want to go travelling, move home, take up a new hobby or even start a new business? Having a broad idea of how you’d like your life in retirement to look, will allow you to plan for it more effectively. Visualizing your ideal retirement setting will tell you how to plan it. As they say, planning to fail is failing to plan.

3. Ask the experts – Nobody expects you to be an expert in saving and investments so use free online advice or seek professional financial advice to help you plan and cost out your retirement plans. This will help you decide on the right approach. Don’t be afraid to ask questions – get clarity before making decisions.

4. From managing to planning – The HSBC study says that managing your finances is not enough; you need to plan where you can save money and how much. Use the online tool such as savings calculators and budgeting apps to help to identify the changes you can make today that will cut costs and then direct the savings to your future.

Staff Writer

This article is written by RupeeIQ editorial staff.