About one-fourth of the Indian population is without pension coverage and only 13 per cent of the country's paid employees are under formal pension arrangement, a survey has found.
"According to the survey, at present, formal pension arrangements cover only 13 per cent of the country's paid employees in India, with a total of 284 million people without pension coverage," Canara HSBC Oriental Bank of Commerce Life Insurance said in a release.
As per the findings of 'The Future of Retirement - It's time to prepare' survey conducted by the insurer, 58 per cent of the respondents in India do not know what their retirement income will look like.
"One of the factors contributing to the unpreparedness is the lack of understanding about their long-term finances over short-term...," the release added.
The findings revealed that 1-in-8 people in India have either reduced or stopped saving into a pension. A further 18 per cent say they would like to seek financial advice to help
them make sense of the choices facing them. Canara HSBC Oriental Bank of Commerce Life Insurance Company chief executive officer Harpal Karlcut said, "India has a high saving ratio compared to other countries."
However, the survey reveals that the motives of saving are more skewed towards saving for children accounting for 35 per cent of savings than saving for retirement which accounted for only 12 per cent."
According to Organisation for Economic Co-operation and Development (OECD), Private Pensions Outlook 2008, pension fund assets in India are very small and make up to only 5 per cent of India's GDP, the release added.
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited was launched in June 2008 and is jointly owned by the public sector banks- Canara Bank (holding 51 per cent) and Oriental Bank of Commerce (23 per cent).
HSBC Insurance (Asia Pacific) Holdings Limited (26 per cent) is the Asian insurance arm of the banking and financial services groups, HSBC.
