Chennai Consumers lesser prepared for the financial and health aspect of retirement compared to other Indian metros

 Chennai Consumers lesser prepared for the financial and health aspect of retirement compared to other Indian metros

India’s affluent scored 72 points on the Retirement Wellness Index, compared to the mass affluent, who scored 68 points

Chennai consumers ranked relatively lower in the “Retirement Wellness Index” compared to the other metros, the study revealed that they were less prepared when it comes to the financial and health aspect of retirement. Saving for unexpected events is one of top priorities for Chennai consumers although, below the India average.

DBS Bank commissioned a Retirement Wellness Study in India conducted by Nielsen, to build a foundation of understanding of life after retirement desires and challenges surrounding personal, family, social and community life.

The study was conducted with primary focus on what DBS believes to be the 3 building blocks of a successful retirement, namely – Health, Enriched life, Wealth.

Findings of the study

The study found that India’s affluent and mass affluent are relatively better prepared to tackle health concerns and are more conscious of their health – two out of three consider themselves to be healthy. On an average, Indians start planning for retirement at the age of 40; while 16% Indians said that they do not plan to retire completely.

The study includes a “Retirement Wellness Index”, which measured retirement preparedness among pre-retirees based on three key pillars: namely health, financial and social aspects. The Index is a weighted average of various attributes across the three pillars, taking into account respondents’ current behaviours and expectations towards retirement.

Overall retirement wellness index in India is at 69 points, compared to the Asia regional average of 56 points, with health having a slightly stronger impact than social and financial aspects on successful retirement. Across the 3 pillars, Indians are more prepared on the health aspect compared to the other Asian countries.

This means that Indians feel better prepared for retirement, health-wise; but are less financially secure about retirement. While a majority of Indians realized the importance of retirement planning, the ability to afford their medical cost emerged as the top concern among Indians when they retire. Further, 1 in 3 respondents were not sure how to estimate health care costs during retirement. Nearly 1 in 2 respondents felt that it will be challenging to cover their retirement needs sufficiently with 57% stating that their total savings would only be able to cover less than 15 years of their retirement needs.

Surojit Shome, General Manager and Chief Executive Officer, DBS Bank India, said “In a market like India which has a fast growing consumer base, such a study, provides extremely important insights into the mindset of people when it comes to planning for their retirement. This in turn allows us to better understand our customers and help in fulfilling the retirement and insurance needs of several individuals and families in India.”

On average, Indians set aside 26% of their monthly income to prepare for retirement at 61 years of age. 93% of Indians have tried to figure out how much to save for their retirement, yet there is a high degree of uncertainty on how much do they exactly need.

Other key findings include:

·        Lack of activities to occupy oneself with during retirement was a top concern among Indians

·        Inflation, health and medicals costs are prime reasons for Indians not being confident about their own retirement wellbeing.

·        Saving money for retirement is a top priority for Indians, VPF/PPF is dominant source of income in retirement. 56% Indians have a VPF account

·        Most Indians plan to retire at 61 years

·        44% of the Indians who have planned for their retirement expect their savings to last more than 15 years

·        Nearly 1 in 2 felt that it will be challenging to cover their retirement needs sufficiently

·        On average,  Indian consumers perceived that INR 32,937 per month is required to fund existing lifestyle during retirement

·        One-fourth 23% who have not started yet planning for retirement consider 56 years of age to start retirement planning. Amongst top barrier is need to have more savings before one could start for retirement planning

·        The top 5 barriers for Indians not planning for retirement were

1.     Need to save more before starting to plan for the future

2.     Other short term financial commitments

3.     Lack of proper know how to start retirement planning

4.     High chance of uncertainties prevent from planning for the future

5.     Unaware of the amount of money required for retirement planning

About the DBS Retirement Wellness Study in Asia

The DBS Retirement Wellness Study in Asia represents the views of more than 6,000 pre-retirees on  their preparedness and expectations towards retirement. The research spans six countries: Singapore, Hong Kong, China, India, Indonesia and Taiwan.

Further in India the research focused on the following six cities: Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad

A total of 1,008 Indians, aged 40 to 60 years old, took part in the research which was conducted online by research firm, Nielsen, in November 2015.

Demographic quotas were set, based on age, gender and monthly household income. This is to ensure national representation in the country.

The Study includes a “Retirement Wellness Index” (RWI), which is a weighted average of various attributes across the three key pillars of successful retirement, comprising the health, wealth and social aspects. It takes into account respondents’ current behaviours and expectations towards retirement, as well as the influence of each attribute. The RWI is calculated on a 100-point scale, the higher the score, the better the preparation towards retirement.

About DBS Bank

DBS - Living, Breathing Asia

DBS is a leading financial services group in Asia, with over 280 branches across 18 markets. Headquartered and listed in Singapore, DBS has a growing presence in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's capital position, as well as "AA-" and "Aa1" credit ratings, is among the highest in Asia-Pacific. DBS has been recognised for its leadership in the region, having been named “Asia’s Best Bank” by The Banker, a member of the Financial Times group, and “Best Bank in Asia-Pacific” by Global Finance. The bank has also been named “Safest Bank in Asia” by Global Finance for seven consecutive years from 2009 to 2015.

DBS provides a full range of services in consumer, SME and corporate banking activities across Asia. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. These market insights and regional connectivity have helped to drive the bank’s growth as it sets out to be the Asian bank of choice. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.

With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 21,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com

 

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