India has ranked first on the AEGON Retirement Readiness Index released by private life insurer AEGON Religare Life Insurance. The country, which participated for the very first time and ranked first on the Index, ahead of BRIC counterparts - Brazil and China.
The report showed that Indians (both workers and those already fully retired) are using a range of instruments to invest in for retirement. Fixed deposits (59%) and Life insurance (54%) were mentioned by over half of those surveyed. Other popular instruments include: Provident Funds (47%), gold (41%), property (40%), pension funds (NPS) (37%), and mutual funds (35%).
With regards to the type of pension plan, twice as many Indians said that they would choose a 'lower return, guaranteed' pension over one that offered higher returns but more uncertainty (62% vs. 31%).
The research team developed the AEGON Retirement Readiness Index to better assess how well employees view their level of retirement preparedness. The India Index score of 7 is the highest of all 15 countries surveyed. This means that an 'average' or 'typical' Indian with online access has only a 'medium' level of retirement preparedness. About 49% of the Indian employees surveyed, claim to be habitually saving, compared with 38% of the global sample.
The findings used in the India report are based on the responses in India of a 15-country online survey, in which 16,000 adults aged 18 and over were surveyed. Fieldwork was conducted in January and February 2014.
K S Gopalakrishnan, Managing Director & Chief Executive Officer of AEGON Religare Life Insurance said: "India is an emerging market for pensions and annuities. With the outcome of the Retirement Readiness Survey where India has ranked first on the retirement readiness index, we are confident that there exists a huge potential for specific pension and annuity plans. With AEGON's global expertise in this segment, we are hoping to bring in products to satisfy the retirement appetite of the Indian consumer."
The report also showed that respondents in India are amongst of most positive of all the countries surveyed, both with regard to expectations for the economy and their own financial situation in the next 12 months. About 48% expect the economy to get better and 57% expect their own financial situation to get better.
Lower disposable income is the main reason for not investing. About 65% said that lack of money to invest is an obstacle to saving for retirement. They said that a pay rise would encourage 41% to save for retirement.
