Indians lead the retirement readiness race

Aegon Life has unveiled its fifth annual Aegon Retirement Readiness Survey. Of the 15 countries surveyed, India leads in retirement readiness and is the only country to score more than 7 in the Aegon Retirement Readiness Index.

The Aegon Retirement Readiness Index (ARRI) of India has shown a steady uptrend from 7.0 in 2014 to 7.3 in 2016. This indicates that Indians are making gradual but certain progress in their readiness for retirement.

The survey took into account feedback from 1,000 Indians. Of these, 900 are working and 100 are fully retired.

2016 Aegon Retirement Readiness Index

The survey also revealed that a whopping 86% of Indians agree that the government must encourage employers to automatically enroll their employees into a retirement plan.

The report points out that subgroups like women, part-time workers, low income earners, and the less educated are vulnerable and less able to achieve retirement readiness. As such they would particularly benefit from more structured arrangements in terms of enrollment in workplace retirement plans.

Not relying on state support

While Indians believe that retirement planning is a shared responsibility, it must also be noted that a mere 25% expect their retirement income to come from government funding compared to 46% globally. Indian workers and retirees expect to fund over two-fifths of their income in retirement through their own savings and investments.

Speaking about the Aegon Retirement Readiness Survey 2016, Mr. K.S. Gopalakrishnan, Managing Director & Chief Executive Officer of Aegon Life Insurance said, "It is a proud moment that India has clinched the highest position in Retirement Readiness globally. The survey has brought out the positive attitude that Indians have towards savings and retirement planning."

The ARRI survey sought responses to six questions – three broadly attitudinal and three broadly behavioral in nature. The objective was to gauge the participants' sense of personal responsibility, level of awareness, financial understanding, retirement planning and income replacement - how confident a person is that they will achieve the level of income they require in retirement.

Confidence about retirement income is high

These six variables have inched higher since 2014, with income replacement showing the most noticeable increase. The income replacement variable has risen to 50% in 2016 from 43% in 2014, indicating the positive sentiment among Indians about achieving 75% or more of the income they require for a comfortable retired life.


  • Indians are mostly using life insurance and fixed deposit accounts as a means of preparing for retirement.
  • Two-in-five people use the Employer's Provident Fund (EPF), the National Pension System (NPS), mutual funds, or property.
  • Nearly two thirds of Indian workers have a backup plan for income if they have to stop working before the planned retirement age. The majority will dip into their savings (71%) as a backup. Others have planned ahead by purchasing income protection (39 percent) or will rely on their spouse's income (34%) to tide them over.
  • Indians are more than twice as likely to have a plan in writing as the global average.
  • In India, auto enrollment is most attractive, with nearly all workers finding automatic enrollment appealing at either 6% or 8% of their annual salary.
  • Between 2014 and 2016 there has been a 10 percentage point increase in habitual saving, and noticeably, the largest increase was seen between 2015 and 2016.
  • Sixty-eight percent of all Indian workers feel their employers provide enough information and support to help with their retirement planning.

Key suggestions

  • Employers should be encouraged to set up a comprehensive retirement savings plans for the employees. They should also encourage a culture of consistent saving among their employees.
  • Indian employers must look at instituting digital access to employee retirement savings plans and to use any and all digital tools to keep workers engaged with their retirement savings. This will provide an easy and fast access for employees to manage their retirement savings pot.
  • Retirement strategies should include a backup plan to enable individuals to pay for unexpected expenses and events. While Indians are aware of and currently use income protection products as a backup they should also be encouraged to explore other more cost effective plans such as life and critical illness polices.
  • Governments and employers should encourage individuals to work longer or, at a minimum, facilitate their working past normal retirement age.

Download the full report (pdf)