Only 13 per cent Indians have pension cover

Despite having the highest savings ratio in the world,58 per cent Indians are clueless about how they are going to fund...

Despite having the highest savings ratio in the world,58 per cent Indians are clueless about how they are going to fund their retirement,says a recently conducted survey,The Future of Retirement by HSBC Life Insurance.

In the absence of a social security net,and the fact that only 13 per cent of the countrys population is covered under any formal pension plan,this figure is quite worrisome. Moreover,with spiralling medical costs and increasing life span,the absence of a retirement plan can wreck havoc in old age. At present,almost 28.4 crore people are estimated to be without any pension coverage in the country. The reason for such complacency could be the fact that the average age of a person in India is 26.

At such a young age,retirement might seem too far to be worried about. However,the high percentage of a young population is unlikely to remain forever.

By 2050,the number of dependent adults in the country is expected to equal the number of dependent children for the first time. This highlights the need for having a well thought retirement plan in place.

Even though only 42 per cent Indians have some plans for their retirement,the percentage is the highest in the world. According to the survey,almost 87 per cent people think they are doing too little to actively prepare for a comfortable retirement. The figure assumes importance in the backdrop of the increase in the worlds aging population.

According to a World Population prospects report,the worlds population is set to increase from two billion as on March 2009,to over nine billion in less than a century. Of this,the population over 65 years of age will jump from 550 million to over 1.4 billion by 2015.

Of the 1,000 people surveyed in India,13 per cent claim that they do not have any access to financial guidance,due to which they do not understand the importance of retirement planning. Most of their savings are channelised towards children education funds. Almost 35 per cent of people in India save money for their children to ensure a better a future for them and a mere 12 per cent have started investing in some sort of a retirement plan.

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Of those surveyed in the country,21 per cent think that more tax relief measures should be put in place to encourage more savings. The global survey took feedback from 15,000 respondents across 15 countries,including five industrialised economies and 10 developing ones.