Financial and physical health have been among the top two stressors for Indians amid the COVID-19 pandemic, ahead of relationships and family. At a time when economic anxiety is increasing, an overwhelming 90% Indians identify financial health as having a profound impact on their well-being. Having a financial plan in place and investing in wealth creation have emerged as ways to help alleviate financial stress and build a greater sense of personal well-being today.
These findings are based on Scripbox’s survey on ‘Wealth & Well-being’, which aims to understand investor behaviour and sentiment amid the pandemic. Conducted ahead of World Savings Day which falls on October 31, Scripbox, a leading digital wealth management platform, aims to create awareness on the importance of saving and investment that can create a virtuous circle with lifelong benefits. The online survey by Scripbox polled 630+ respondents in the 25-55+ age group across India. An equal number of men and women responded to the survey.
Amid COVID-19, Indians have been most stressed because of their physical health (54%), followed by financial health (46%), ahead of family (28%) and relationships (23%), the survey revealed. An overwhelming 90% of Indians agree that financial health has a profound impact on their well-being. Respondents polled for this survey cite that having a financial plan in place (42%) and investing in wealth creation (23%) will lend significantly to their optimism about the future and their sense of well-being.
However, most Indians do not save enough. Nearly 50% save 0 to 20%, and 20% save between 20 to 30% of their income. “Indians are also recklessly safe with their savings, with a majority preferring fixed income products such as PPF, LIC and other tax saving schemes, fixed and recurring deposits, or just letting it lie in their savings accounts. One in four respondents invest in Mutual Funds,” the survey noted.
Compared to women, men view investments such as mutual funds, shares and stocks more favourably. Among men, two in three continued to stay invested in equity markets during the pandemic compared to less than one in three women.
Interestingly, millennials (those under 35 years of age) are far more likely to let their savings lie idle in their bank accounts than those over 35 years, who would rather invest it than let money lie idle, indicating maturity of understanding of financial planning.
In the backdrop of the pandemic, emergency fund creation tops the goal that 54% respondents want to save or invest for, followed by children's education (46%) and retirement (43%). While creating an emergency fund is a priority for both men and women, a higher percentage of men (47%) would like to prioritise investing for retirement, while a majority of women (55%) for their children’s education. Despite the intent to do so, saving for retirement is not taking priority right now, sidelined by other financial goals. Fifty six percent said that they did not actively invest to set up a retirement corpus.
Given the correlation between wealth and well-being, nearly 50% of respondents would like to advise their younger selves to start investing as early as possible in life.
There is also optimism about the economy recovering within a year, and continuing on the same growth trajectory as in pre-COVID times. Men are more optimistic about the economy getting back on track within a year (54%) compared to women (41%).
“Saving and investing form two ends of one’s financial-planning spectrum. When people embrace investing, they create a greater sense of well-being which stems from the confidence of being in charge of their wealth creation journey. But despite this, a majority of Indians continue to squirrel away their savings in tax saving instruments or letting it lie idle in their bank accounts. Understanding financial goals and picking instruments that help compound wealth over the long-term is key to avoiding regret. This is confirmed by a majority of respondents whose advice to their younger self would be to start investing as early as possible,” said Prateek Mehta, co-founder and Chief Business Officer at Scripbox.