Emerging affluent consumers in India can increase their savings by as much as 48% if they move from basics savings approach to a low-risk wealth management strategy, says a study.
According to Standard Chartered’s Emerging Affluent Report ‘The Race to Save’, Asia’s emerging affluent are missing out on a potential 42% uplift in savings.
The emerging affluent are consumers who are earning enough to start saving and investing. A majority of these people are using basic products like savings accounts and fixed-term deposits to reach their financial goals.
A switch to a more effective approach could make a huge difference. Consumers in Hong Kong, Singapore, India and Taiwan could increase their savings by as much as 86%, 52%, 48% and 43%, respectively, over 10 years, the study noted.
The study of 8,000 emerging affluent consumers across eight markets in Asia and Africa also finds that home ownership and children’s education are top savings priorities for most individuals ahead of retirement.
Saving for life after work only comes out on top for the 45-55 year olds, whereas in India, children’s education is the priority for almost all age groups.
“With access to the right information and simple, low-risk wealth management solutions, they will have a better chance of achieving their goals of owning a home, funding their children’s education and putting enough aside for their retirement,” Standard Chartered CEO of Retail Banking Karen Fawcett said.
While a vast majority of the emerging affluent (96%) do save, many say low interest rates discourage them from saving more than they currently do, it said.
Almost a third (30%) of people in the markets surveyed say low interest rates stop them from saving more. This sentiment is felt strongest in China (39%), Korea (38%), Taiwan (38%) and India (32%), it added.