Majority of retired Indians prefer bank deposits for income: HSBC report

Second property is the next preferred option for post-retirement income

Most Indians rely heavily on cash deposits and second property to generate post-retirement, says a report by HSBC, 'The Future of Retirement: A Balancing Act.'

Most Indians also believe that buying a house and paying for children's education were the two top factors, which have significantly impacted their ability to save for retirement, the report said.

The HSBC survey shows, living comfortably during retirement is a real concern for many working Indians. Almost 74% of pre-retirees are concerned about having enough money to live comfortably in retirement. For women, this figure rises to 79%, compared with 71% of men.

The survey was conducted with 16,000 in 15 countries and territories worldwide, of 1000 respondents from India. Of these Indian respondents, 88% of the people were confident that cash deposits were a good option to generate income for retirement. This was the highest proportion amongst the polled countries. In Indonesia, 82% preferred cash deposits, in USA it was 64% and in UK it was 56%.

Eight-five% of the Indians polled were confident of second property as a source of retirement income. Comparatively, the proportion of Indonesians who felt the same way was 90%, while in case of USA it was 54% and in UK it was 60%.

Insurance products (81%), personal pension schemes (80%) and employer pension schemes (76%) were some of the other options that Indians preferred for retirement income, the report said.

Sanjiv Sud, Head of Retail Banking and Wealth Management, HSBC India said: "Our research shows, Indians are finally realising that they are not adequately saving for a comfortable retirement. The preferred means of cash deposits and income from second home, opted by Indians, alone may not deliver what they hope for."

'Life Events' impacting the ability to save

India, along with Malaysia, has the largest proportion of people (41%) who think buying a home or paying for its mortgage adversely impacted their ability to save for retirement. This compares with global average of 32% and that of 28% in Brazil and 29% in Mexico.

Also, 29% of Indians believe, paying for children's education affected their retirement saving plans, compared to a global average of 24%.

The current economic downturn, significant drop in earnings, job loss and illness or accident were the other key events, which impacted the ability of Indians to save for retirement, the report said.

Sud added: "Start saving early and keep re-filling your retirement pots while being wary of unexpected events, which may dig a hole into your savings. That's a simple way to save substantially for retirement."