Indians are wise savers but poor investors: Survey

"Financial security is an essential element of inclusive growth. In a more dynamic labor market and in the absence of established state-provided mechanisms of social security, households in India increasingly need to look to financial instruments to meet their asset accumulation and old-age goals," said Suman Bery, Director-General, NCAER. "Yet the pattern of financial asset accumulation is relatively primitive indicating a need for much greater awareness of the role that specific financial instruments can play in reducing financial vulnerability and enhancing financial security."

"There is an urgent need for a financial literacy program to make people understand their options and financial needs at different life stages," said Analjit Singh, Chairman, Max India Ltd, commenting on the solutions for financial protection to meet both long-term financial needs and loss of main source of income. "Life insurance is one of the most important financial instruments for financial security. In the rapidly changing Indian economic and social environment, life insurance products sold appropriately to the consumers not only create awareness of the changing reality but also help reduce their vulnerability and overall improve the long-term financial security of the individual, the family and thereby the nation."

"Understanding household saving is of importance for several reasons. At the national level, household savings provide the main source of investment financing both for government and for the corporate sector. Rapid GDP growth leads to rising household income and higher saving rates. This is true for India as it has been elsewhere in Asia," a press release stated.

"But for the individual household, saving is done in order to achieve specific short-term and long-term goals, notably financial security. Accordingly, the main goal of the Max New York Life-NCAER survey is to gain deeper insight into the motives for financial saving, the degree of financial security (or vulnerability) of Indian households, and the degree of sophistication that households bring to bear in their saving and investment decisions," it said.

(Rs.1 lakh = Rs.100,000)