The Future of Retirement Shifting sands
Foreword
We live in interesting times. Unprecedented political, social,
economic and technological change means it has never been
more challenging or more important to save for a good
retirement.
Our latest report in The Future of Retirement series, Shifting
sands, looks at how important issues like the ageing
population, rising healthcare costs and long term low interest
rates are affecting the retirement plans of people around the
world.
The report investigates how people are making sacrifices,
exploring new sources of funding and adjusting their retirement
expectations for a world that is very different even to that of ten
years ago.
I hope that the new insights and practical steps in this report
will help you to plan for the best possible retirement.
Charlie Nunn
Group Head of Wealth Management, HSBC
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The Future of Retirement Shifting sands
Key findings
of working age people think low
interest rates mean they will need to
work for longer
50%
of working age people believe levels
of national debt mean there will be
less support for the elderly
66%
of working age people believe
retirees will have to spend more on
healthcare costs in the future
77%
of working age people think they will
be financially comfortable in
retirement, based on how their
retirement saving is progressing
34%
of working age people say they will
continue working to some extent in
retirement
58%
of working age people think that
property offers the best returns for
retirement saving
47%
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The Future of Retirement Shifting sands
Key findings
of people think Millennials are in the
best position for a comfortable
retirement, compared to 42% who
think Baby Boomers are
10%
of working age people believe new
technology makes saving for
retirement easier
47%
of working age people believe new
technology will help give future
retirees a better standard of living
55%
is the average age Millennials
started saving for retirement
26
is the average age Millennials
expect to retire
59
5
of people believe that Millennials are
paying for the economic consequences
of previous generations
58%
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The Future of Retirement Shifting sands
65% 63% 67% 66%
24% 26% 25% 17%
A new world
The world is changing and retirement is changing with it.
Major political, social, economic and technological changes
are having a significant impact on how people view their
retirement prospects.
Ageing populations and rising national debts are sapping
confidence in the ability of economies around the world to
continue supporting older people. Overall, 65% of working
age people are concerned about declining state
pensions/social provision and 64% about the growing
number of older people requiring retirement funding/support.
Around two-thirds (66%) agree that levels of national debt
mean there will be less support for the elderly.
Almost a quarter (24%) of working age people believe state
pensions will no longer exist when they come to retire, and
this view is more common among Millennials (26%) than
Baby Boomers (17%).
Working age people are concerned about declining state
pensions/social provision
Q. Do you think state pensions will still exist when you come to retire?
A. No (Base: Working age people)
Working age people who believe state pensions will no
longer exist when they retire
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Q. To what extent, if at all, are you concerned about the following affecting your retirement?
A. Declining state pensions/social provision (Base: Working age people)
*Excludes China and Taiwan
Generation X Baby BoomersMillennials
Average*
Generation X Baby BoomersMillennials
Average*
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The Future of Retirement Shifting sands
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Volatile economies
Sixty-eight percent of working age people are concerned
about the impact of economic uncertainty on their ability to
save for retirement. Sixty-one percent say it will be more
difficult to save for a comfortable retirement following the
financial crisis of 2007/8. The majority (62%) are also
concerned about whether their employer pension scheme(s)
will be able to pay out in full.
‘Lower for longer’ interest rates are also making it harder to
save for a comfortable retirement. Half (50%) of working age
people think low interest rates mean they will need to work
for longer, while 48% say they need interest rates to rise if
they are to save enough to be comfortable in retirement.
of working age people
think low interest rates
mean they will need to
work for longer
50%
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The Future of Retirement Shifting sands
Health cheque
Working age people are worried about the availability and
affordability of healthcare
Q. Which three of the following issues do you worry about the most?
A. Availability/affordability of healthcare (Base: Working age people)
Singapore
Hong Kong
Australia
USA
Egypt
Canada
Malaysia
UAE
United Kingdom
India
Indonesia
Mexico
France
Argentina
46%
30%
30%
29%
27%
26%
22%
21%
19%
16%
12%
11%
8%
50%
Average*
25%
The rising cost of healthcare is another important issue, with
77% of working age people believing that retirees will have
to spend more on healthcare costs in the future.
Twenty-five percent of working age people worry about the
availability and affordability of healthcare. More in Singapore
(50%) and Hong Kong (46%) are concerned about this than
in Argentina (8%), France (11%) and Mexico (12%).
*Excludes China and Taiwan
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The Future of Retirement Shifting sands
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The changes in the retirement landscape are forcing people to
adjust their expectations for retirement. Based on how their
retirement saving is progressing, only 34% of working age people
around the world think they will be financially comfortable when
retired, with those in India (69%) and Indonesia (61%) the most
likely to think this and those in France (10%) and Australia (21%)
the least likely.
Meanwhile, constant change is making it difficult to plan ahead,
with 44% of working age people believing things change so much
that their retirement plan won't be applicable by the time they
retire. More than a quarter (27%) have not started saving for
retirement.
In light of this, 58% of working age people say they will continue
working to some extent in retirement. Seventy percent would be
willing to defer their retirement for two years or more to have a
better retirement income. Forty-two percent would work for
longer or get a second job to sustain their saving for retirement.
Asian and European countries differ in their willingness to defer
retirement. Among working age people who have a retirement
age in mind, many in India (82%), Hong Kong (80%), Singapore,
Taiwan and Indonesia (all 79%) are willing to defer their
retirement for two or more years to have a better retirement
income. This compares to only 37% in France and 55% in the UK.
of working age
people say they will
continue working to
some extent in
retirement
58%
Expecting the worst
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The Future of Retirement Shifting sands
Australia
64 85
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Length of retirement
On average, working age people around the world expect to
retire at age 61 and expect to live to age 81, resulting in a
retirement of 20 years.
China, Argentina and Canada are the countries where
working age people expect to have the longest retirement
(24, 23 and 23 years), while those in Egypt, India and UAE
expect the shortest (4, 12 and 15 years).
Q. What age do you expect to retire? Q. What age do you expect to live to?
(Base: Working age people)
Age expect to retire Age expect to live to
USA
61 83
India
61 73
Singapore
62 80
Canada
62 85
UAE
58 73
Hong Kong
63 80
Taiwan
62 81
France
64 85
Mexico
62 84
Indonesia
59 80
Malaysia
59 77
Argentina
63
86
UK
65
82
Average
61
81
Egypt
59 63
China
59 83
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The Future of Retirement Shifting sands
Funding retirement
In a time of continuing economic volatility, property is viewed
as a good way of saving for retirement, with 47% of working
age people thinking it delivers the best returns. This
compares to 38% for cash savings, 29% for stocks and
shares, 22% for personal pension schemes, 20% for
employer pension schemes and 13% for
government/corporate bonds.
This is not yet fully reflected in retirement plans, with only
10% of working age people expecting property to help fund
their retirement. Forty-eight percent expect employer
pension schemes to be a source of funding, cash savings
39%, state pensions/social security 37%, and stocks and
shares 18%.
With interest rates at historic lows, 47% of working age
people think they will need to move their money from
savings into investments.
Q. Which of the following do you think offers the best returns for retirement saving?
(Base: Working age people)
Property is viewed as offering the best returns for
retirement saving
Cash savings
38%
Government/corporate bonds
13%
47%
Property
Personal pension schemes
22%
Employer pension schemes
20%
Stocks and shares
29%
13
9%
Foreign currency
Buying a business
11%
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The Future of Retirement Shifting sands
Argentina
35%
India
68%
China
79%
Risk appetite
Overall, there is a fairly low appetite for risk, with around a
third (34%) of working age people being very willing to make
risky investments to ensure their financial stability. There is
a strong East-West divide, with the highest proportions of
working age people willing to take such risks in China (61%)
and Taiwan (47%), and the lowest in France (10%) and the
UK (15%).
Additionally, a much higher proportion of working age people
in Asian countries actively move their money around to get
the best return/deal than in Western countries.
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Q. Now thinking more specifically about your approach to your finances, to what
extent do you agree or disagree with the following statements?
A. I actively move my money around to get the best return/deal
(Base: Working age people)
Moving money around to get the best return/deal
Average
47%
UK
36%
USA
33%
Australia
32%
Singapore
46%
Canada
27%
UAE
51%
Hong Kong
43%
Taiwan
44%
France
14%
Mexico
41%
Indonesia
64%
Malaysia
46%
Egypt
60%
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The Future of Retirement Shifting sands
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A perfect storm
The economic challenges facing the Millennial generation
(those born between 1980 and 1997) are starkly reflected in
their retirement prospects.
Fifty-three percent of people believe that Millennials have
experienced weaker economic growth than previous
generations, while 58% agree that Millennials are paying for
the economic consequences of older generations, such as
the global financial crisis and rising national debt. Also, 45%
of people believe that employer pension schemes may go
bust or be unable to pay out to Millennials.
However, 54% of people say that Millennials don’t know how
good they have it, enjoying a better quality of life than any
generation before them.
of people think Millennials have
experienced weaker economic
growth than previous generations
53%
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The Future of Retirement Shifting sands
61
59
61
64
81
79
81
84
Retirement prospects
When it comes to retirement, Millennials are seen as less
fortunate than previous generations. Only 10% of people
think Millennials are in the best position for a comfortable
retirement, compared to 42% who think Baby Boomers are.
Only 14% of Millennials believe that their own generation is
in the best position to retire comfortably.
In terms of life expectancy and retirement planning, 63% of
people – and 59% of Millennials themselves – believe the
Millennial generation will live much longer and will need to
support themselves for longer.
In light of this, the Millennial generation may be being over-
optimistic about the age they expect to retire. Of those
planning to retire, Millennials expect to retire at age 59
(compared to 61 for Generation X and 64 for Baby
Boomers) and expect to live to age 79 (compared to 81 for
Generation X and 84 for Baby Boomers), resulting in a
retirement of 20 years.
Age expect to live to
Age expect to retire
Generation X
Millennials
Baby Boomers
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Q. What age do you expect to retire? Q. What age do you expect to live to?
(Base: Working age people)
Average
Expected length of retirement
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The Future of Retirement Shifting sands
Taking action
On average, Millennials started saving for retirement at age
26. However, 32% of Millennials have not yet started saving
for retirement, compared to 25% of Generation X and 21%
of Baby Boomers.
Millennials are more likely to take investment risks than
other generations, with 39% being very willing to make risky
investments to ensure their financial stability, compared to
33% of Generation X and 22% of Baby Boomers.
Sixty-five percent of Millennials are prepared to cut back
on their present expenses in order to save, compared to
59% of Generation X and 54% of Baby Boomers.
A higher proportion of Millennials actively seeks information
to guide their financial decisions (61%, compared to
Generation X 56%, Baby Boomers 50%), and actively
moves their money around to get the best return/deal (51%,
compared to Generation X 45%, Baby Boomers 39%).
of Millennials are prepared to
cut back on their expenses in
order to save
65%
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The Future of Retirement Shifting sands
Defining the generations
1960s
MARTIN LUTHER KING
Millennials
Born 1980 to 1997
Baby Boomers
Born 1945 to 1965
Generation X
Born 1966 to 1979
1945
End of WWII
1957
European Common
Market established
1969
Moon landing
1960s
US Civil Rights
movement
1989
Fall of Berlin Wall
1953
Discovery
of DNA
W
AR
ENDE
D.
19
1969
Woodstock
festival
1991
Launch of
Internet
1997
First Harry
Potter book
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The Future of Retirement Shifting sands
35%
27%
19%
18%
14%
14%
27%
22%
15%
14%
12%
8%
Saving time and money
Technology is changing the way people save for retirement.
Almost half (47%) of working age people agree that new
technology makes it easier to save for their retirement, with
a much higher proportion in China (77%) and India (69%)
than in France (17%) Argentina (28%) and the UK (30%).
People are using new technology in different ways to plan
for and manage their retirement.
Working age people
Retirees
Q. What role, if any, has new technology played in helping you plan for your
retirement? (Base: All)
21
Used a retirement planning app
Received robotic financial advice
Used an online retirement calculator
Put money into an online saving account
Researched options on the internet
Spoke to an adviser online e.g. live chat
How new technologies help people plan for retirement
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The Future of Retirement Shifting sands
87%
78%
76%
73%
87%
55%
68%
65%
Stay connected
Additionally, over half (55%) of working age people believe
that new technology will help give future retirees a better
standard of living.
People are using or think they will use new technologies in
different ways in retirement.
Q. Do you think you will use/are you using any of the following new technologies in
your retirement? (Base: All)
22
Working age people Retirees
Helps me stay connected with family and friends
Monitors and maintains my health
Helps me stay active and mobile
The role of technology in retirement
Helps me to continue working
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The Future of Retirement Shifting sands
Practical steps
Here are some important insights and practical actions drawn from the research findings, which may
help today’s retirement savers plan a better financial future for themselves.
23
Be realistic
about your
retirement
Consider
different
sources
of funding
Plan for the
unexpected
Take
advantage of
technology
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The Future of Retirement Shifting sands
Practical steps
24
63%
of people think Millennials
will live much longer and will
need to support themselves
for longer. 77% of working
age people believe retirees
will have to spend more on
healthcare costs in the
future.
Make sure you are well
prepared for a long and
comfortable retirement by
starting to save earlier and
more. Factor potential
healthcare costs into your
retirement planning.
Here are some important insights and practical actions drawn from the research findings, which may
help today’s retirement savers plan a better financial future for themselves.
Consider
different
sources
of funding
Plan for the
unexpected
Take
advantage of
technology
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The Future of Retirement Shifting sands
Practical steps
25
47%
of working age people think
low interest rates mean they
will need to move their
money from savings into
investments. 47% think
property offers the best
returns for retirement saving.
Balance your ways of saving
and investing for retirement
to spread the risk and
maximise the returns. Be
realistic about your expected
returns.
Here are some important insights and practical actions drawn from the research findings, which may
help today’s retirement savers plan a better financial future for themselves.
Be realistic
about your
retirement
Plan for the
unexpected
Take
advantage of
technology
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The Future of Retirement Shifting sands
Practical steps
26
45%
of people believe that
employer pension schemes
may go bust or be unable to
pay out to Millennials. 40%
of working age people would
go back to work if their
retirement income could no
longer provide the standard
of living they were used to.
Unexpected events can
have a major impact on
retirement funding. Include
worst case scenarios when
planning your retirement and
consider putting protection in
place to help secure your
retirement income.
Here are some important insights and practical actions drawn from the research findings, which may
help today’s retirement savers plan a better financial future for themselves.
Be realistic
about your
retirement
Consider
different
sources
of funding
Take
advantage of
technology
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The Future of Retirement Shifting sands
18%
of people have used an
online retirement calculator
and 17% a retirement
planning app.
Embrace new technology to
make planning for your
retirement easier. Online
planning tools can help you
understand your retirement
funding needs and track
progress towards your goals.
Seek professional financial
advice if you need help.
Practical steps
27
Here are some important insights and practical actions drawn from the research findings, which may
help today’s retirement savers plan a better financial future for themselves.
Be realistic
about your
retirement
Consider
different
sources
of funding
Plan for the
unexpected
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The Future of Retirement Shifting sands
28
The Future of Retirement is a world-
leading independent research study
into global retirement trends,
commissioned by HSBC. It provides
authoritative insights into the key
issues associated with ageing
populations and increasing life
expectancy around the world.
This report, Shifting sands, is the
fourteenth in the series and
represents the views of 18,414
people in 16 countries and
territories.
Since The Future of Retirement
programme began in 2005, more
than 177,000 people have been
surveyed worldwide.
The research
About HSBC CopyrightSurvey Legal
PUBLIC
The Future of Retirement Shifting sands
29
The Future of Retirement is a world-
leading independent research study
into global retirement trends,
commissioned by HSBC. It provides
authoritative insights into the key
issues associated with ageing
populations and increasing life
expectancy around the world.
This report, Shifting sands, is the
fourteenth in the series and
represents the views of 18,414
people in 16 countries and
territories.
Since The Future of Retirement
programme began in 2005, more
than 177,000 people have been
surveyed worldwide.
The research
The 16 countries and
territories are:
Argentina
Australia
Canada
China
Egypt
France
Hong Kong
India
Indonesia
Malaysia
Mexico
Singapore
Taiwan
United Arab Emirates
United Kingdom
United States
The findings are based on
a representative sample of
people of working age
(21+) and in retirement, in
each country or territory.
The research was
conducted online by Ipsos
MORI between November
2016 and January 2017,
with additional face-to-face
interviews in Egypt and the
UAE.
Country reports are also
available.
Retirees are people who
are semi or fully retired.
Working age people are
those who have yet to fully
or semi-retire.
Global figures are the
average of all countries
and territories surveyed
unless stated otherwise.
All figures are global unless
stated otherwise.
Figures have been rounded
to the nearest whole
number.
Survey
PUBLIC
The Future of Retirement Shifting sands
30
The Future of Retirement is a world-
leading independent research study
into global retirement trends,
commissioned by HSBC. It provides
authoritative insights into the key
issues associated with ageing
populations and increasing life
expectancy around the world.
This report, Shifting sands, is the
fourteenth in the series and
represents the views of 18,414
people in 16 countries and
territories.
Since The Future of Retirement
programme began in 2005, more
than 177,000 people have been
surveyed worldwide.
The research
HSBC Holdings plc, the parent
company of the HSBC Group, is
headquartered in London. The
Group serves customers
worldwide from around 4,000
offices in 70 countries and
territories in Europe, Asia, North
and Latin America, and the
Middle East and North Africa.
With assets of US$2,375bn at 31
December 2016, HSBC is one of
the world's largest banking and
financial services organisations.
About HSBC
PUBLIC
The Future of Retirement Shifting sands
31
The Future of Retirement is a world-
leading independent research study
into global retirement trends,
commissioned by HSBC. It provides
authoritative insights into the key
issues associated with ageing
populations and increasing life
expectancy around the world.
This report, Shifting sands, is the
fourteenth in the series and
represents the views of 18,414
people in 16 countries and
territories.
Since The Future of Retirement
programme began in 2005, more
than 177,000 people have been
surveyed worldwide.
The research
Information and/or opinions
provided within this report
constitute research information
only and do not constitute an
offer to sell, or solicitation of an
offer to buy any financial
services and/or products, or
any advice or recommendation
with respect to such financial
services and/or products.
Legal
PUBLIC
The Future of Retirement Shifting sands
32
The Future of Retirement is a world-
leading independent research study
into global retirement trends,
commissioned by HSBC. It provides
authoritative insights into the key
issues associated with ageing
populations and increasing life
expectancy around the world.
This report, Shifting sands, is the
fourteenth in the series and
represents the views of 18,414
people in 16 countries and
territories.
Since The Future of Retirement
programme began in 2005, more
than 177,000 people have been
surveyed worldwide.
The research
© HSBC Holdings plc 2017
All rights reserved.
Excerpts from this report may be used or quoted, provided
they are accompanied by the following attribution:
‘Reproduced with permission from The Future of Retirement
Shifting sands, published in 2017 by HSBC Holdings plc.’
HSBC is a trademark of HSBC Holdings plc and all rights in
and to HSBC vest in HSBC Holdings plc. Other than as
provided above, you may not use or reproduce the HSBC
trademark, logo or brand name.
Published by HSBC Holdings plc, London
www.hsbc.com > Retail Banking and Wealth Management
HSBC Holdings plc
8 Canada Square, London E14 5HQ
Copyright
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