When Financial Planning in Dubai, this Insurance Broker in Dubai says he is worried about number 11 on the attached list – is this you?
The UK is one of the least prepared countries in the world for retirement while Malaysia is one of the best, according to HSBC’s latest global report.
People in the UK expected their retirement savings to last for just 37% of their retirement in contrast to Malaysia’s anticipation that the savings would last 71% of the time, according to ‘The Future of Retirement. A new reality’ report which is the eighth in HSBC’s series of global studies into retirement. The global average across the 15 countries surveyed showed the concerning statistic that retirement savings will run out just after the halfway point (56%).
The UK pension shortfall was ranked behind Egypt (45%), France (47%), China (50%) and Taiwan (50%). The report’s author’s Mark Twigg, executive director of Cicero Consulting, said: “We are now witnessing an acknowledgement among those in their 30s and 40s that working in retirement is, and may have to be, part of their formal retirement plans. With employment now seen as part of a flexible retirement plan, it is clear that the labour market will need to adapt and health and long-term care policies need to be developed aimed at promoting more active and healthy life styles among older workers.”
Another worrying trend was that nearly half of all respondents (48%) had never saved for retirement, peaking in higher income countries such as France (65%). This compares with 54% in the UK, 56% in Australia and 50% in Taiwan. To underline the urgency of the retirement provision situation, HSBC pointed to a further study in the UK which illustrated that by deferring savings by ten years from age 30 to age 40, private pension income for a median earning man expecting to retire in 2055 could drop 32%.
Twigg said that because the majority of people in developed countries “can now expect to live into their 80s and beyond, many of those people will require additional long-term care provided through the state, families or other private means”. He concluded that “efforts to raise awareness about the risks of retirement income shortfalls need to continue. So too do the fledging efforts to develop effective financial planning tools to help households evaluate that risk”.
Retirement savings shortfall by country
1 UK 37%, 2 Egypt 45%, 3 France 47%, 4 China 50%, 5 Taiwan 50%
6 Brazil 52%, 7 Australia 52%, 8 Mexico 53%, 9 Singapore 53%, 10 Canada 58%
11 UAE 60%, 12 Hong Kong 65%, 13 USA 67%, 14 India 67%, 15 Malaysia 71%