VANCOUVER, June 10 /CNW/ - A 'PERFECT STORM' of demographic, individual
and financial elements is poised to derail people's retirement plans unless
they prepare properly now, a global survey from HSBC Insurance reveals today.
The fifth annual Future of Retirement study, It's Time to Prepare, shows:
- people's short-term survival strategies in the midst of recession are
creating a serious long-term pensions 'downturn deficit'
- there is a continuing lack of pensions planning, even though people
are aware that they are likely to live longer
- this is being exacerbated by poor levels of financial understanding,
education and access to advice
- people are more concerned with protecting their possessions in the
short-term than ensuring they can look forward to a financially
The consequence of these combined factors is that many people will
struggle to make ends meet when they come to retire, unless they urgently
review their priorities and planning.
Stephen Green, Group Chairman of HSBC, said: "A perfect storm is
confronting pensions planning, created by an ageing population, falling
pension funds values, a drop in state and employer contributions and an
economic downturn which is forcing people to make tough financial choices."
The preparedness gap
It's Time to Prepare has identified a 'preparedness gap' in people's
pensions planning across the world with nearly 9 out of 10 people not feeling
fully prepared for their retirement.
The Future of Retirement survey, which questioned 15,000 people in 15
countries, making it the largest study of its kind in the world, reveals:
- Only 13% of respondents feel fully prepared for their retirement
- 86% do not know what income they will receive in retirement
- Only a quarter (27%) feel they fully understand their long-term
- Approaching half (43%) have undertaken some planning for later life,
but still remain unclear about what their retirement income will look
- 14% have done no retirement planning at all.
Stephen Green continued: "The 'preparedness gap' reveals that families
need greater support and guidance to effectively handle their finances, not
simply in schools and colleges but through 'trusted advisers' providing
professional financial guidance.
"If people prepare adequately for the long-term an extended later life
can present a golden opportunity for many - but now is the time for people to
seriously consider boosting their pensions contributions to improve their
prospects of a comfortable retirement. The cost of procrastination is likely
to be high."
Advice gap opens up
It's Time to Prepare also reveals a parallel 'advice gap' linking a lack
of preparedness to insufficient financial education and guidance:
- 43% of respondents have never had any form of financial education
- And 29% also feel 'fairly' unprepared for their retirement
- Almost half (47%) have never had any form of professional financial
Clive Bannister, Group Managing Director, HSBC Insurance, said: "This
year's Future of Retirement report reveals a need for people to have access to
more and better financial advice and guidance to help them survive the
downturn while making the right financial decisions for the long-term."
Coping with the downturn - possessions not pensions?
People are paying little attention to long-term considerations such as
their likely retirement needs, focusing instead on purely practical short-term
concerns which they better understand, It's Time to Prepare reveals.
General insurance solutions - motor, travel, home and even pet insurance
- are seen as a greater priority than addressing longer-term needs around
insuring health or income, even when job security is in question.
Despite global economic uncertainty, only 6% intend to take out income
protection insurance in the next 12 months compared to 16% insuring their
The Future of Retirement survey shows that, as a result of the economic
- 92% of people have changed some element of their finances
- Only 19% will now retire as planned
- 17% are reducing retirement savings or stopping saving for retirement
- 18% have used savings to pay off debt
- 9% expect to delay their retirement
Mark Twigg, Director at financial services consultancy Cicero Consulting,
which undertook the survey for HSBC Insurance, said: "It's Time to Prepare
reveals the lack of understanding people have around their long-term
retirement needs. They are less well educated or aware when trying to
understand these needs and to act on them, than with their short-term
"As the economic 'perfect storm' threatens it is important that people
are encouraged to understand long-term risks and to manage them effectively.
While people are taking more responsibility for themselves, there is also a
definite role for financial institutions to continue, and to build on, their
work to educate and inform."
Notes to editors:
1. The Future of Retirement - For further information visit
2. HSBC Insurance provides policies in over 50 countries and territories
to its personal, commercial, corporate, institutional and private
banking customers. The diverse needs of its customers worldwide are
recognised by HSBC Insurance and it offers products and services to
suit them including: life assurance, general insurance, commercial
risk and retirement provision.
Find out more at www.hsbc.com/insurance
3. HSBC Bank Canada, a subsidiary of HSBC Holdings plc, has more than
290 offices, including over 140 bank branches, and is the leading
international bank in Canada. With around 9,500 offices in
86 countries and territories and assets of US$2,527 billion at
December 31, 2008, the HSBC Group is one of the world's largest
banking and financial services organizations.
4. Cicero Consulting is a leading UK and Brussels based financial
services consultancy specialising in thought leadership and market
developments in retirement planning and pensions issues.
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For further information: Further media information is available from:
Sharon Wilks, (416) 868-3878; Stuart Disbrey, 020 7861 2495 or 07789 500 465,
firstname.lastname@example.org; Lucy McCartney, 020 7861 2507 or 07944 611 570,