India, China and Singapore have the highest proportion of consumers wanting to continue working beyond retirement whilst France UK and Italy have the lowest proportion wanting to work beyond retirement age.
Developed nations in our research are much more pessimistic over their children’s future. The most optimistic countries being China, India, Singapore and Russia. The most pessimistic outlook for their children’s future in terms of having a better standard of living is held by France
Consumers appear to be in denial over retirement planning with UK and US the most likely to not know how much or have not considered how much income they will need in retirement.
Work looms post-retirement
Aviva’s Consumer Attitudes to Savings survey shows the very wide range of attitudes to financial futures. Three quarters of Indian respondents see themselves as wanting to work after the normal retirement date, whilst two thirds of those in China, Singapore, Turkey and Russia are of a similar view.
At the other extreme just one in four of those in France and one third of those in the UK and Italy see themselves as wanting to work beyond retirement age. This can perhaps partly be explained by retirement being a relatively new concept in some markets, whilst for others it will be that retirement planning has been a feature for quite some time.
East takes lead in living for today
When it comes to “living for today”, it is countries such as China, India and Russia seem to lead the way in preferring the spend today rather than the save for tomorrow culture. Perhaps then it is little wonder that these same are planning to carry on working beyond normal retirement age.
West pessimistic over children’s future
And there are some very clear differences of opinion when it comes to consumer attitudes about children’s futures. It is again the East that have a much more positive outlook. When asked “How likely do you think is it that today’s youth will have a better life than their parents?”, nearly all those in China (96%) and India (95%) felt positive. 70% of those in Singapore, and 63% of those in Russia also felt positive about their children’s future.
Clearly much of this is seated in historical and cultural differences with the West, but it may be that this positive attitude is resulting in a much more consumerist society. With economic uncertainty comes a sense of concern for their children’s future and we see very few consumers in Western countries saying that the “youth will have a better life than their parents”. In France only 16% agreed with this statement, Italy (18%), UK (29%), and Spain (30%).
Wide variance for material happiness
There are also some interesting differences between countries when looking at material happiness. There is a very clear sense in many markets that consumers feel they have got all the material things in life that they need. Whilst not a majority, in each of these countries there are significant proportions saying that they have reached the point of having sufficient material possessions.
In the UK (48%), Spain (46%), USA (45%), and Ireland (44%) many consumers agree they have enough possessions, which could well impact on economic activity as consumers switch from buying traditional products to spending their money in other ways e.g. experiential activity. However, many developing markets, display the desire for more material possessions. Just 14% of Poles feel that they have reached material happiness, with Russia (22%) Turkey (27%), and Singapore (35%) also showing similar levels of contentment.
Interestingly, Italy stands out as the one European country surveyed that hasn’t reached material happiness yet with just 26% agreeing that they have enough material possessions. Clearly the Italians haven’t had their fill of Gucci, Dolce and Gabbana, and Armani!
Savings vulnerable to daily living
Despite this materialism there are many consumers who are relying on their savings to live day by day. 58% of those in India agreed that they were relying on their savings, whilst 37% in Italy were also reliant upon their savings. At the other extreme, Poland had just 14% relying on their savings with similar low figures for UK (17%) and France (18%).
Uncertainty impacts attitude to risk
Across the countries surveyed, seven in ten (70%) agreed that life in general is more risky than it used to be, although China has the lowest “level of concern” with just 55% seeing life in this. This cautious attitude will undoubtedly impact on consumer attitudes to savings and investments and the prospective returns that they can expect to receive.
Consumers focus on debt reduction
With this sense of risk comes the feeling that consumers need to embark on debt reduction. A significant drag on any economic recovery is both the extent of household debt and the pace at which consumers feel the need to reduce this debt. Nearly two thirds in Poland (63%) and Singapore (58%) are looking to pay off debt as quickly as possible, whilst just 36% of Italians and 39% in the UK are looking to pay off their debts as quickly as they can.
Consumers in denial over retirement planning
This survey also reveals that many consumers do not know how much income they are going to need to get by or survive in retirement. Perhaps it is a combination that “it will work itself out”, or the event is too far in the future to worry about it now, or, most concerning, it is just best not to know. The UK stands out as the country with the greatest proportion of consumers that either do not know or have not considered how much will be needed.
The US is not in a much better space with a third (34%) not knowing how much they will need. Ireland, Spain, India and Poland see one in four of their populations don’t know how much they will need to get by or survive on in retirement.
“This survey suggests that whilst many are in search of material happiness, people appear to be choosing not to consider their financial futures and are living in hope that it will all come good”, said Rob Hancock, Aviva’s senior insight manager (global markets). “It is hardly surprising that the majority of those surveyed across all countries believe that life is becoming more risky than it used to be and that working beyond the normal retirement age is the answer. There is an important role that insurers like Aviva can play in helping consumers plan their financial futures”.
