India's Sandwich Generation Feels Their Investments Are ‘Never Enough' For Financial Security: Report

Over 60 per cent of India's Sandwich Generation feels that they are not prepared for their future and that their efforts in planning their financial stability are never enough

According to a recent study conducted by Edelweiss Life Study, around 60 per cent of India's Sandwich Generation reported that “no matter how much I save or invest, I feel like it's never enough for the future.”

Sandwich generation consists of people between the age group of 25 years old and 54 years old, as per the report.

Sumit Rai, MD & CEO, Edelweiss Life Insurance, said, “Through our customer interactions over the years, we have closely seen how Sandwich Generation is living in a cycle of caring for their parents and children. They want to enable the essentials like healthcare and education while providing an aspirational life where ‘needs' don't come at the cost of ‘wants.' This is primarily driving their financial decision-making. And, in the process, they often end up relegating their own dreams to the background, leaving them feeling they are unprepared for the future.”

“This generation knows their key aspirations and believes to be adequately planned through investments in their preferred product categories. But our study has brought up some curious facts. They display low intent on sticking with these active investments over the next 1 – 2 years. They also have accessed their investments, which are earmarked for pre-defined goals, ahead of time. No wonder they are feeling they are on shaky ground,” Rai added.

Key Findings of the Survey

The life insurer conducted a survey in collaboration with YouGov. They surveyed 4,005 respondents in this generation across 12 cities to understand their attitudes, beliefs, and level of financial preparedness.

Additionally, the survey added that the most preferred financial planning tools included, Life Insurance, Health Insurance, Mutual Funds, Equities, and Bank FDs . Meanwhile, less than 60 per cent currently have active investments across categories, and even fewer expect to persist with them over the next 1 – 2 years.

The study further revealed that all the above products have been prematurely liquidated, by their holders. Which means that they were accessed before their pre-defined goals were met.

Though the reason behind liquidation was dominated by essential needs, non-critical needs like vacations, and spending during festivities were also one of the few drivers.

Around 50 per cent of the respondents feel the fear of running out of money and always feeling slacking off. They found themselves driven by their duty and love for their family.

According to the survey the respondents had reasonably high confidence in financial planning.Investing After Retirement: Know How Senior Citizens Can Avoid Paying TDS On Interest Income From Fixed Deposits

With 94 per cent saying that they either have a detailed plan or have undertaken some degree of planning. A majority of 72 per cent of respondents also believed that their investments are linked to specific aspirations. How Senior Citizens Can Effectively Manage Funds, Cashflow In Retirement

64 per cent however said they use some form of credit to fund their short-term needs, while 49 per cent savings. The study indicates that credit coupled with cash/income is allowing them to address critical needs like healthcare and education, but also providing them flexibility to meet non-critical needs like vacation, home renovation, etc.

For long-term aspirations, 79 per cent expect to depend on returns or gains from financial instruments, and 71 per cent on regular future income.

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