People in their 30s and 40s face biggest financial pressure of any age group, according to new research from HSBC
YEREVAN, August 15. /ARKA/. People in their 30s and 40s face the biggest financial pressure of any age group, according to new research from HSBC’s long-running study, The Future of Retirement.
The survey of over 18,000 working age people and retirees across 17 countries found that within this age bracket, 69% are financially supporting others and the same proportion are putting money into longer-term savings, while 63% are having to make loan repayments.
According to the survey, those aged between 30 and 49 are facing the greatest pressure on their money, creating a ‘sandwich generation’ of people with financial obligations to those both older and younger than themselves.
This pressure does not relent until people reach their 50s, when many experience a period of affluence. As older children start to leave home, parents are able to reduce their expenditure on others, with significantly fewer (57%) of those aged 50 and above financially supporting others.
The benefits of the ‘empty nest’ can be seen in the rise in the proportion of people in their 50s and above choosing to spend their money on leisure and entertainment (76%), including holidays and trips (56%), as well as in the lower proportion who are repaying loans (50%).
The research also shows that the financial pressures traditionally faced by the sandwich generation of 30 and 40 year olds are now likely to extend to even younger people, with many in their late 20s having to repay borrowing and financially support others (52%).
Crucially, younger people don’t appear to recognize the implications of these financial outgoings and the effect that they could have on their lifestyle in retirement. Nearly half (46%) of working age people aged 25 to 29 are spending on their hobbies, compared to just 36% of those in their fifties enjoying new-found affluence.
Attitudes towards finances play a part in this, with 42% of people in their late 20s saying that they prefer to enjoy life in the present and not worry about the impact this might have in the future. This outlook suggests that this generation could be ill-prepared to cope with the financial burdens that they are likely to face over the coming decades.
The survey also reveals that under a quarter (24%) of people in their late 20s think that being in control of their finances is one of the most important things in life, and many of this age group give little thought to their later lives, with 44% believing that the distant future is too uncertain to plan for.
Analysis of HSBC Armenia’s retail loan portfolio reveal a picture quite similar to the global findings. The average age of individuals using lending products is 39. Those in their 20s comprise 20% of individuals having a loan, while the ‘sandwich generation’ represents the whole 60% of the retail loan book, with people in their 30s topping the list (35%). Similarly, numbers drastically go down with a growing age as people in their 50s (15%) and 60s (6%) seem to be less willing to take financial burden.
Paul Edgar, HSBC Bank Armenia Chief Executive Officer (designate) comments: “As the ‘sandwich generation’ widens and financial pressures start building on even younger generations, it is important for people of all ages to be aware of their finances and to take a more active role in saving for later life.
“Proper preparation, including savings or consideration of participation in the national pension scheme will help younger people prepare for their retirement.”
Practical steps
HSBC’s research identified four actions that people can take to improve their financial well-being in retirement.
1. Consider all your retirement expenses
When planning for retirement, make sure to list all your possible retirement outgoings
2. Start saving earlier for retirement
Plan to start saving for retirement earlier, to help build a bigger fund and allow it to grow for longer
3. Make sure your advice is professional
Seek information from many sources, but make sure the advice you get is professional
4. Be prepared for financial ups and downs
When saving for retirement gets difficult, make sure to review all your finances and seek alternative ways to help you continue towards a comfortable retirement
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, Generations and journeys, is the 13th in the series and represents the views of 18,207 people in 17 countries and territories worldwide (Argentina, Australia, Brazil, 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 nationally representative survey of people of working age (25+) and in retirement, in each country or territory. The research was conducted online by Ipsos MORI in September and October 2015, with additional face-to-face interviews in Egypt and the UAE. Since The Future of Retirement programme began in 2005, more than 159,000 people worldwide have been surveyed.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,000 offices in 71 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,596bn at 31 March 2016, HSBC is one of the world’s largest banking and financial services organizations.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 4,400 offices in 71 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,608bn at 30 June 2016, HSBC is one of the world’s largest banking and financial services organizations.
HSBC Bank Armenia cjsc was established as a closed joint stock company under the name Midland Armenia Bank J.S.C. in 1996 and was renamed HSBC Bank Armenia cjsc in 1999. The bank is a joint venture between the HSBC Group, which has 70 per cent ownership, and members of overseas Armenian businesses with 30 per cent ownership. HSBC Armenia serves around 33,000 customers through nine offices located in Yerevan and around 400 employees. The bank has assets of AMD238.8 billion as of 30 June 2016 and is one of the leading banks in the foreign exchange market in Armenia. -0-
The survey of over 18,000 working age people and retirees across 17 countries found that within this age bracket, 69% are financially supporting others and the same proportion are putting money into longer-term savings, while 63% are having to make loan repayments.
According to the survey, those aged between 30 and 49 are facing the greatest pressure on their money, creating a ‘sandwich generation’ of people with financial obligations to those both older and younger than themselves.
This pressure does not relent until people reach their 50s, when many experience a period of affluence. As older children start to leave home, parents are able to reduce their expenditure on others, with significantly fewer (57%) of those aged 50 and above financially supporting others.
The benefits of the ‘empty nest’ can be seen in the rise in the proportion of people in their 50s and above choosing to spend their money on leisure and entertainment (76%), including holidays and trips (56%), as well as in the lower proportion who are repaying loans (50%).
The research also shows that the financial pressures traditionally faced by the sandwich generation of 30 and 40 year olds are now likely to extend to even younger people, with many in their late 20s having to repay borrowing and financially support others (52%).
Crucially, younger people don’t appear to recognize the implications of these financial outgoings and the effect that they could have on their lifestyle in retirement. Nearly half (46%) of working age people aged 25 to 29 are spending on their hobbies, compared to just 36% of those in their fifties enjoying new-found affluence.
Attitudes towards finances play a part in this, with 42% of people in their late 20s saying that they prefer to enjoy life in the present and not worry about the impact this might have in the future. This outlook suggests that this generation could be ill-prepared to cope with the financial burdens that they are likely to face over the coming decades.
The survey also reveals that under a quarter (24%) of people in their late 20s think that being in control of their finances is one of the most important things in life, and many of this age group give little thought to their later lives, with 44% believing that the distant future is too uncertain to plan for.
Analysis of HSBC Armenia’s retail loan portfolio reveal a picture quite similar to the global findings. The average age of individuals using lending products is 39. Those in their 20s comprise 20% of individuals having a loan, while the ‘sandwich generation’ represents the whole 60% of the retail loan book, with people in their 30s topping the list (35%). Similarly, numbers drastically go down with a growing age as people in their 50s (15%) and 60s (6%) seem to be less willing to take financial burden.
Paul Edgar, HSBC Bank Armenia Chief Executive Officer (designate) comments: “As the ‘sandwich generation’ widens and financial pressures start building on even younger generations, it is important for people of all ages to be aware of their finances and to take a more active role in saving for later life.
“Proper preparation, including savings or consideration of participation in the national pension scheme will help younger people prepare for their retirement.”
Practical steps
HSBC’s research identified four actions that people can take to improve their financial well-being in retirement.
1. Consider all your retirement expenses
When planning for retirement, make sure to list all your possible retirement outgoings
2. Start saving earlier for retirement
Plan to start saving for retirement earlier, to help build a bigger fund and allow it to grow for longer
3. Make sure your advice is professional
Seek information from many sources, but make sure the advice you get is professional
4. Be prepared for financial ups and downs
When saving for retirement gets difficult, make sure to review all your finances and seek alternative ways to help you continue towards a comfortable retirement
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, Generations and journeys, is the 13th in the series and represents the views of 18,207 people in 17 countries and territories worldwide (Argentina, Australia, Brazil, 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 nationally representative survey of people of working age (25+) and in retirement, in each country or territory. The research was conducted online by Ipsos MORI in September and October 2015, with additional face-to-face interviews in Egypt and the UAE. Since The Future of Retirement programme began in 2005, more than 159,000 people worldwide have been surveyed.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,000 offices in 71 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,596bn at 31 March 2016, HSBC is one of the world’s largest banking and financial services organizations.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 4,400 offices in 71 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,608bn at 30 June 2016, HSBC is one of the world’s largest banking and financial services organizations.
HSBC Bank Armenia cjsc was established as a closed joint stock company under the name Midland Armenia Bank J.S.C. in 1996 and was renamed HSBC Bank Armenia cjsc in 1999. The bank is a joint venture between the HSBC Group, which has 70 per cent ownership, and members of overseas Armenian businesses with 30 per cent ownership. HSBC Armenia serves around 33,000 customers through nine offices located in Yerevan and around 400 employees. The bank has assets of AMD238.8 billion as of 30 June 2016 and is one of the leading banks in the foreign exchange market in Armenia. -0-