Urban India’s Retirement Index Increases from 47 to 49, While Gig Workers Lag at 46 with Lower Retirement Readiness: Max Life IRIS 4.0

Category: Insurance
written by International Khabar | October 24, 2024
From L to R - Amit Kukreja, Prashant Tripathy, Naina Lal Kidwai and Subrata Chaudhuri

Max Life Insurance Company Ltd. (“Max Life”/ “Company”) has launched the 4th edition of its retirement survey, India Retirement Index Study (IRIS)*, conducted in partnership with KANTAR, the world’s leading marketing data and analytics company. The IRIS 4.0 reveals that Urban Indias retirement preparedness has increased from 47 points in IRIS 3.0 to 49 points in IRIS 4.0, driven by greater awareness and proactive steps in both health and financial planning. Urban Indian working women scored 50 on the retirement index, 1-point higher than men. The latest edition introduces two new segments – Double Income No Kids (DINKs) and Gig workers+. DINKs align closely with the overall Indian population, with an index score of 49 points, indicating strong health and financial preparedness. In contrast, Gig workers score only 46 points, reflecting lower readiness across the cohort.

The India Retirement Index Study (IRIS) continues to be a key initiative in Max Life’s mission to make India retirement-ready. This year, the study was launched at the “India Retirement Insight Summit,” an exclusive event in partnership with CNBC-TV18. The summit featured engaging panel discussions and fireside chats that explored the concerns, triggers, and challenges shaping India’s retirement landscape, with a focus on the financial well-being of urban Indians. Prominent industry leaders including Naina Lal Kidwai, Amit Kukreja, Subrata Chaudhuri, and Asheesh Gupta, along with sports icon Saina Nehwal and Public Speaker & Content Creator Ankur Warikoo, shared valuable insights on the evolving dynamics of retirement planning in India.

The IRIS 4.0 findings highlight that a growing number of urban Indians believe that the retirement planning should start early. 44% Indians consider the right age to start planning for retirement is before 35 years, increasing from 38% in IRIS 3.0. 93% of the respondents above 50 years of age regret delaying retirement planning. Encouragingly, 63% respondents have already begun investing for retirement, leading to reduced concerns about meeting both basic and luxury needs, as well as securing their children’s futures. A notable 68% of urban Indian working women have begun investing for retirement, a 7-point increase from last year. The study also highlights regional opportunities in retirement planning across India, with the East zone leading in overall preparedness, the West zone showing financial and health progress but needing emotional focus, and the North and South zones improving in health preparedness index.

As per IRIS 4.0, 97% urban Indians are aware of Life Insurance as a suitable financial product, with 67% already invested in life insurance as the ideal financial product for retirement, and 37% have invested in health insurance. However, 31% urban Indians are not aware about the retirement corpus needed to sustain current lifestyle, with only 27% urban Indians expecting their savings to last between 5 to 10 years, and 30% worry about exhausting funds within just 5 years.

Prashant Tripathy, CEO and Managing Director, Max Life said, “Preparing for retirement is a critical priority for the future of Indians, especially as life expectancy rises with advancements in healthcare, emphasizing the need for long-term financial planning. The IRIS 4.0 study reveals that although Urban Indias retirement index has improved with positive gains in the Financial and Health indices, 1 in 3 Indians still feel underprepared. This year, we also focused on Gig workers due to the rapid growth of Indias gig economy, and found that they lag with a lower retirement readiness. This signals a huge opportunity area to bring the cohort at par with the national average through focused interventions.”

He adds, “Today, more urban Indians recognize the importance of starting retirement planning early, with a growing preference for life insurance as a savings tool-2 in 3 are investing in these products for retirement. Notably, urban Indian working women are taking the lead in investments, actively securing their financial futures. These trends highlight a positive shift towards proactive retirement planning and financial independence among urban Indians.”

Soumya Mohanty, MD and Chief Client Officer, South Asia, Insights Division, Kantar said, “India Retirement Index Study (IRIS) 4.0 delivers sharp, data-backed insights into the retirement preparedness of urban Indians across varied demographics. By focusing on key indicators-financial, physical, and emotional readiness-the study offers a clear view of the nations retirement outlook. Our partnership with Max Life highlights our shared goal of enhancing financial security for Indians, ensuring they are well-prepared for their retirement years.”

Key findings from the India Retirement Index Study 4.0

Metros Lead in Retirement Preparedness, Awareness Grows Across Indian Cities

  • In IRIS 4.0, Metros have taken the lead in retirement planning, with an overall index score of 50. This is driven by positive indices of Finance (51), Health (49), and Emotional (60). Notably, 42% of Metro residents engage in regular physical activities, contributing to their confidence in being fit and healthy during retirement. Tier I and Tier II cities have also made progress. Tier I cities have an overall index score of 49, with improvements in Financial (54) and Health (45) indexes. Tier II cities have increased their financial index from 50 to 53 that has helped increase the overall index to 47. However, their emotional index remains at 60, indicating a need for further focus on emotional well-being.

Regional Differences highlight need for comprehensive retirement planning across India

  • The IRIS 4.0 study’s zonal insights reveals varying regional preparedness, emphasizing the need for comprehensive retirement planning across India. The Eastern zone continues to lead in retirement planning with 54 points, excelling across all sub-indices where the regions Finance Index stands at 57, Health Index at 51, and Emotional Index at 62, demonstrating a well-rounded approach to retirement preparedness. The West zone has made significant strides, particularly in finance and health. The regions Finance and Health Index has increased by 3 points each to 53, and 46 points respectively. However, the Emotional Index remains at 57, indicating a need for further focus on emotional well-being. The North zone has shown substantial improvement in health preparedness, with the Health Index increasing by 5 points to 45, while the South zone has seen slight increase in Health Index rising to 45.

Urban Indian Working Women Lead the Charge in Retirement Preparedness

  • A deep dive into the retirement readiness of urban Indian working women reveals a remarkable shift: they are now better than men by 1-point in overall retirement preparedness, boasting a retirement index of 50. Financially, urban Indian working women are keeping pace with men, with 66% being confident that their current investments will ensure a financially secure retirement life. Health wise, 48% urban Indian Working Women feel confident that they will be fit and healthy in their retirement years.

DINKs Show Stronger Retirement Readiness Compared to Gig Workers

  • Insights into retirement preparedness reveal stark differences between DINKs (Dual Income, No Kids) and Gig workers. DINKs align closely with the overall Indian population, boasting an IRIS index score of 49, indicating strong health and financial preparedness. In contrast, Gig workers score only 46, reflecting lower readiness across the board. Their financial index lags 4 points behind the national average (48 vs. 52), and health readiness is also lower at 44 compared to 46 overall.

Gig workers feel less secure, with 76% being highly worried about providing for family’s basic needs during retirement – this is 70% for the overall urban Indian respondents. Similarly, 77% Gig workers are worried about providing for luxury expenses in retirement – this is again 70% for the overall urban Indian respondents. Securing their children’s future is a major worry with 75% Gig workers expressing worry about it.

7 in 10 Urban Indians Embrace Retirement Optimism Amidst Growing Concerns

  • Urban India exudes optimism about retirement, with over 70% linking it to positive experiences like a stress-free life, quality family time, and greater independence. However, 27% express concerns about challenges such as declining health, boredom, and loneliness. While 55% of the respondents stay in Nuclear families, but out of them 93% plan to stay with their children post-retirement. Additionally, 55% feel confident in the support of family and friends, yet a striking 82% are worried about how changing environmental factors may impact their retirement lifestyle.

Reliance on Family Wealth Hinders Proactive Retirement Planning Amidst Growing Need for Financial Guidance

  • A significant reliance on family wealth and children as safety nets is hindering proactive retirement planning for many urban Indians, with 42% depending on family wealth and 41% looking to their children for financial support in retirement.

Moreover, the data underscores an urgent need for trusted financial advisors, as 31% of urban Indians report feeling a lack of guidance on their retirement journey. This gap in support highlights the necessity for accessible, expert advice to empower individuals in making informed decisions about their financial futures.

Urban Indians Shift Towards Wellness, Envisioning a Healthier Retirement

  • Urban Indians are increasingly prioritizing wellness over mere prevention, with 83% envisioning a healthy retirement. Confidence in achieving fitness during their golden years has surged to 47%, up from 38% in the above cohort of respondents. This proactive approach to health is further highlighted by the rise in health insurance purchases, now at 50%, compared to 44% previously. This trend emphasizes the growing importance of wellness in ensuring a healthier and more fulfilling retirement.

National Pension System Gains Traction as 9 in 10 Users Trust Its Safety and Reliability

  • The National Pension System (NPS) is gaining traction as a trusted investment choice, with over 90% of respondents considering it as a ‘safe and reliable’ product. Awareness has surged, especially in Tier II cities (78%), where NPS ownership now stands at an impressive 25%. Both the East and South zones show robust awareness (74% and 72%, respectively), with East and West zone leading in ownership (26% and 22%, respectively) as well. Top sources of NPS awareness include TV Commercials (62%), News Articles (39%), and Colleagues/Family/Friends (37%). On the other hand, the key factors driving NPS adoption include attractive returns (57%), lifelong income (40%), and better tax saving option (36%). Despite this positive outlook, challenges such as handholding and lack of complete product understanding still limit broader adoption.

Read more about the India Retirement Index Study at – www.maxlifeinsurance.com/iris-india-retirement-study-index

* The India Retirement Index Study assesses urban Indias preparedness to live a healthy, peaceful, and financially secure retired life. For the 4th edition of the digital study, 2,077 respondents were surveyed across 28 cities in India. The index is composed of three sub-indices measuring health, financial, and emotional readiness for retirement, on a scale of 0 to 100.

+ Gig Workers respondents are white-collar Gig workers who are defined as people working temporary jobs, typically in the service sector as an independent contractor or freelancer. In this survey, the average age of Gig workers was 38 years.

About India Retirement Index Study

India Retirement Index Study is an annual retirement study by Max Life conducted in partnership with KANTAR. The survey aims to understand the retirement readiness of Urban India, with insights into awareness, aspirations and challenges of consumers during retirement and its planning. India retirement index is the degree to which Indians feel prepared for tomorrow’s retired life on a scale 0 to 100. It is based on how prepared India is for a healthy, peaceful & financially independent post-retirement life.

About Max Life Insurance

Max Life Insurance Company Limited is a Joint Venture between Max Financial Services Limited and Axis Bank Limited. Max Financial Services Ltd. is a part of the Max Group. Max Life offers comprehensive protection and long-term savings life insurance solutions, through its multi-channel distribution including agency and third-party distribution partners. Max Life has built its operations over two decades through a need-based sales process, a customer-centric approach to engagement and service delivery and trained human capital. As per annual audited financials for FY2023-24, Max Life has achieved a gross written premium of INR 29,529 Cr.

For more information, please visit the Company’s website at www.maxlifeinsurance.com

About Kantar

Kantar is the world’s leading marketing data and analytics business and an indispensable brand partner to the world’s top companies. We combine the most meaningful attitudinal and behavioural data with deep expertise and advanced analytics to uncover how people think and act. We help clients understand what has happened and why and how to shape the marketing strategies that shape their future.

To know more, visit www.kantar.com.