HSBC’s survey found ample evidence that the combination of planning and professional advice will yield the best results for a secure retirement. Referring to it as a “planning premium,” HSBC said those who plan not only receive “hard benefits,” (such as having a broader range of retirement and non-retirement assets than those who do not have a plan, and having a significantly higher value of assets), but they also receive “soft benefits,” (such as having a more positive outlook towards aging, and worrying less about coping financially in retirement).
Looking at the results of 17,000 survey respondents from 17 countries, HSBC found many have a pessimistic outlook: 41% feel that they are under-prepared for retirement to some extent, while 64% said they are concerned that they will not be able to cope financially in retirement. One in five respondents did not know what their main source of income would be in retirement.
Although one-third believe that work will play a role in their ability to enjoy retirement and 9% expect paid employment to provide their main source of retirement income, the survey found attitudes to retirement age have not changed; most people expect to retire in their 60s.
Optimism for younger generations
HSBC found younger respondents are undertaking financial planning at earlier ages than previous generations; particularly, younger women are more engaged than are those in their 50s. Fifty-four percent of all men said they have a financial plan in place; this climbs to 58% for men between the ages of 30 to 39 and falls to 49% of men between 50 and 59. Forty-four percent of all women have a financial plan; this climbs to 47% for women between 30 and 39, and 38% for women between 50 and 59.
Key barriers to financial planning and advice
Considering how much better off those who plan are, HSBC examined what prevents people from adopting a financial plan or from seeking advice. Not having enough money was found to be the major barrier stopping people from developing a plan (60%), not knowing how to go about it (23%), not thinking it would be useful (15%), and a lack of time (15%), particularly for those in higher income groups who are likely to be in demanding careers which leave them ‘cash-rich’ but also ‘time-poor.'
Not surprisingly, HSBC found many people appreciate financial advice which is suited to their busy lifestyles: 41% said that a financial advice session should last no longer than 30 minutes and should focus on their immediate needs. However, one in three who sought financial advice failed to then act on that advice, the survey found.The complete HSBC report is available here.