New Delhi: Younger Indians, notably those aged 25 years or below, now prefer early retirement and among this group, 43 per cent desire to retire between 45 and 55 years, according to a new report released on Tuesday.
Overall, a significant 56 per cent of respondents plan to retire between the ages of 55 and 65, aligning with standard retirement practices in India.
More than half (55 per cent) of respondents expect a monthly pension exceeding Rs 1 lakh. However, only 11 per cent believe their current investments are sufficient to meet these expectations, said the survey-report by Grant Thornton Bharat.
According to the findings, government-backed plans remain the most preferred option, with 39 per cent of participants favouring such schemes.
High-risk, high-return plans are particularly appealing to younger respondents, with 31 per cent of participants under 25 years expressing interest in these options. This finding suggests a growing appetite for risk among the younger demographic.
The government has replaced the National Pension Scheme (NPS) with the Unified Pension Scheme (UPS). The UPS guarantees government employees 50 per cent of their last drawn salary as a lifelong monthly pension, along with periodic dearness relief hikes and a minimum pension of Rs 10,000.
The government has also launched the NPS Vatsalya scheme, which aims to secure children’s financial future through a pension account. The scheme allows minors to subscribe, with flexible contributions starting at Rs 1,000 annually. It includes an online platform for easy registration and is also available to NRIs.
“As our working population expands, the gap between expected retirement needs and actual savings behaviour is becoming increasingly evident. Bridging this gap requires a robust and inclusive pension ecosystem that aligns with the lifecycle needs of individuals while supporting macroeconomic objectives like capital formation and financial stability,” said Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat.
Many people also feel their gratuity amounts are insufficient, and the low rate of annuity investments further emphasises the uncertainty surrounding guaranteed post-retirement income.
“As India becomes the 4th largest economy its essential for it to have a resolute pension system. The changing demographics which will see an increase in ageing population by 2050 will rely on pension for financial independence,” said Ramkumar S, Partner, Grant Thornton Bharat.
(IANS)
