Many Indians may not be saving enough for retirement
The overall contribution to retirement products is relatively low for most individuals in India, suggesting that many people may not be saving enough for retirement, Grant Thornton Bharat said in its report based on the analysis of a pension survey conducted between August 2024 and September 2024.
The survey analysis pointed out notable dissatisfaction, especially with national pension system (NPS) returns. 'While employees' pension fund (EPF) and
NPS
are popular retirement products, there is notable dissatisfaction, especially with NPS returns, indicating the need for better-designed, more attractive retirement solutions.
'The NPS scheme may need reforms to address concerns about returns and customer satisfaction,' it suggested.
The report further said that there is a significant gap between the desired pension and the perceived adequacy of current
retirement savings
.
'Financial institutions should consider introducing more guaranteed income products, such as annuities, to cater to the demand for stability' it said.
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'Respondents prioritise long-term financial security over high returns, and there is strong interest in government-backed pension plans, although younger people are more inclined toward high-risk, high-reward strategies,' it added.
According to the report, many people are unaware of specific government schemes (like
Atal Pension Yojana
) and how their pension amounts are calculated. 'This suggests a need for greater financial literacy and transparency around pension planning,' it said.
The report aims to inform policymakers, individuals, employers, and financial institutions about the prevailing attitudes and gaps in the pension landscape by presenting a mix of qualitative insights and quantitative data supported by graphical representations.
'The insights from the report serve as a foundation for developing better policies and enhancing financial literacy among employees to ensure a secure and stable retirement,' the report said.
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