78% of wealthy Indian parents send kids abroad, risking retirement savings
Only 53 per cent of wealthy parents have education savings for their kids abroad; 40 per cent expect student loans, 51 per cent hope for scholarships, and 27 per cent are willing to sell assets
Rimjhim Singh New Delhi Although a vast majority of affluent Indian parents — around 78 per cent — either aim to send their children abroad for higher education or already have a child studying at foreign universities, their financial preparedness for this endeavour is often lacking, according to HSBC "Quality of Life Report 2024".
According to the report, these parents frequently place their children’s international education above their own retirement planning.
The forecast indicates that over two million Indian students will pursue studies abroad by 2025. The study indicates that as education costs escalate, financing is a major concern for parents. A three or four-year degree in popular destinations like the US or the UK could deplete up to 64 per cent of their retirement savings, the study said, which surveyed 1,456 affluent Indians.
Only 53 per cent of these well-to-do parents have an education savings plan for their children’s overseas studies. As many as 40 per cent expect their child to incur student loans, while 51 per cent hope for scholarships. Additionally, nearly one-third (27 per cent) are even willing to sell assets to fund their child’s education.
The study also highlighted that managing the necessary funding, selecting the right course and university, and meeting admission requirements significantly heighten stress for Indian parents.
Global concerns about cost of living
Beyond the costs of overseas education, the study also examined attitudes towards financial goals, health-related risks, and the impacts of increasing healthcare expenses and physical and mental health issues.
Globally, affluent individuals are most concerned about the rising cost of living, high inflation, health problems, increased healthcare costs, and insufficient retirement savings. For Indian respondents, the top financial goals are supporting their families (45 per cent), building wealth for financial security (41 per cent), investing in real estate (40 per cent), saving for their children’s education (40 per cent), and planning for retirement (38 per cent).
Increase in affluent Indians’ investable assets
Despite these concerns, most Indians surveyed believe they are financially secure. Over 60 per cent reported an increase in their total liquid or investable assets, while 36 per cent observed little change, according to the study.
Although the FIRE (Financially Independent, Retire Early) movement appeals to younger generations, nearly 60 per cent of wealthy Indians plan to continue working after retirement.
Over 40 per cent intend to transfer their full assets after their death, 37 per cent plan to transfer a part of their assets during their lifetimes, and the rest want to transfer a part of their assets on passing.