July 7, Mumbai: AEGON Religare Life Insurance (ARLI), today, released the India report on the AEGON Retirement Readiness Survey 2014 – Changing Face of Retirement. In the 15-country online survey that was carried out jointly by ARLI’s parent company – AEGON and Cicero Consulting, India participated for the very first time and ranked first on the AEGON Retirement Readiness Index (ARRI), ahead of BRIC counterparts – Brazil and China.
The research team developed the AEGON Retirement Readiness Index (ARRI) 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. 49% of the Indian employees surveyed, claim to be habitually saving, compared with 38% of the global sample.
On the release of the India report, Mr KS Gopalakrishnan, Managing Director & Chief Executive Officer of AEGON Religare Life Insurance (ARLI) 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 India report reflects the dynamism, common to emerging markets, and is also linked to the strong savings culture engrained in the Indian society. The economy is young and vibrant; and many Indians are optimistic of the future prosperity. This survey finds that those who have access to a pension are largely confident about their retirement. Yet this group represents only a minority of a population that faces much more extensive challenges to retirement readiness. In the period of prosperity that drives young Indians optimism for the future, the challenge for retirement readiness will be to distribute these gains among all of society.
Positive Aspirations and Expectations
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:
37% (double the global average of 19%) of workers are confident that they will be able to fully retire with a lifestyle they consider comfortable and 43% of fully retired Indians are confident that they will always be able to live in retirement comfortably.
Indians (both workers and those already fully retired) are using a range of instruments to invest in for retirement:
With regards to the type of pension plan, twice as many Indians would choose a ‘lower return, guaranteed’ pension over one that offered higher returns but more uncertainty (62% vs. 31%).
Making Saving Easy
A Flexible Transition
About the Survey
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. The 15-country survey report as well as other country reports, research and communication materials can be found at www.aegon.com/en/home/research. The range of issues covered in the research includes attitudes to retirement preparedness, which serve as the basis of the annual AEGON Retirement Readiness Index, as well as the role of the government and employers in providing retirement benefits. In India, 900 employees and 100 fully retired people were surveyed to provide a contrast between the responses of current workers and those already in full retirement. All findings in the report are based on the Indian survey results unless otherwise stated. The survey did not include the views of the self-employed, students, homemakers, and those not currently employed or unable to work as each of these groups faces specific challenges in planning for retirement which require specific public policy interventions. Instead, the objective in this survey is to provide a broader perspective based on the mainstream working and retired populations.