HSBC finds Global desire for a productive and self-sufficient retirement but business is slow to adapt

- Largest global study on retirement ever undertaken - 20 countries and territories…-43% want to self-fund retirement…-36% support compulsory saving for retirement, the first choice option for funding later life…- 72% want to do away with mandatory retirement…- 49% of employers recognize the high value of older workers, but many lack the practices to attract and retain them

NEW YORK, April 26 /PRNewswire/ -- The largest global survey into attitudes towards aging and retirement ever conducted has found that, around the world, people want to abandon traditional models of retirement in favor of self-sufficiency and a mix of work and leisure. Given a choice, most people (37 percent) think their government should enforce additional private savings, rather than increase the retirement age (24 percent), raise taxes (13 percent) or reduce pensions (7 percent). HSBC's 'Future of Retirement: What the world wants' study surveyed 21,000 people and 6,000 companies in 20 countries and territories and found that, while many older people want to work, and most employers recognize their skills, opportunities are still limited.

Nearly half (43 percent) of individuals worldwide expressed a desire to fund their own retirement either through savings or by working later, perhaps part-time. But the research also revealed that, while 49 percent of the world's employers recognize that older workers are just as productive and motivated as younger ones, most are slow to make the most of the opportunity they present.

Stephen Green, chief executive, HSBC Holdings plc, said, "HSBC's 'Future of Retirement: What the world wants' research shows that individuals increasingly expect to bear their own costs in later life, but governments and business must understand their role in continuing to support individuals. They cannot afford to shy away from the enormous challenges and opportunities presented by global aging."

'Help us help ourselves'

HSBC's research shows that individuals in most countries worldwide want to be primarily self-sufficient in funding their retirement. But a "confidence gap" exists as one in three people (30 percent) worldwide believe the government should bear their costs in retirement, compared to just one in five (21 percent) who believe they will. Individuals also want governments to do more to help them help themselves, such as introducing enforced additional private savings.

How individuals think governments should finance aging populations (in percent)

                                                            Global     United States

  Enforce additional private savings       37            34

  Increase retirement age                     24            22

  Raise taxes                              13            17

  Reduce pensions                           7            10

 

    Source: HSBC Future of Retirement Research 2006

Dr Sarah Harper, director, the Oxford Institute of Ageing, said, "The idea of a period of funded leisure at the end of one's working life has become firmly established, evolving since the 1940s from being seen as a rest, to a reward and now as a right. For the first time, though, the 'Future of Retirement' research shows support globally for some form of compulsory savings for retirement."

Working past traditional retirement age

According to HSBC's research, people the world over want to continue working past traditional retirement ages, with nearly three quarters (72 percent) of respondents rejecting the notion of a mandatory retirement age, believing that employees should be able to go on working to any age as long as they are capable of doing the job well. People have a variety of reasons for wanting to continue to work, including the need for money (25 percent), to have something meaningful and valuable to do with their time (22 percent), to keep physically active (21 percent), to connect with others (13 percent) and for mental stimulation (13 percent). Notably only one in four people chose money as their main reason for wanting to work beyond retirement age.

  When should someone retire? (in percent)

                                         Global     United States

  When the time is right                   36            48

  When they are no longer able to work     25            19

  At a certain age                         21            10

  When they can afford to                  15            23

 

    Source: HSBC Future of Retirement Research 2006

Older workers are valued

Compared to expectations, HSBC's research shows that employers across the globe believe older workers are not only more loyal and reliable than younger workers (58 percent and 53 percent, respectively), but also just as productive and motivated (49 percent and 45 percent, respectively). Individuals indicate that they want more flexible employment practices to help them continue working past traditional retirement age, such as the ability to guide and teach younger workers (39 percent), the opportunity to learn new skills (32 percent), the ability to undertake less physically demanding work (31 percent) and the opportunity to work fewer hours (32 percent).

However, HSBC has found that employers aren't doing enough to retain older workers, which puts the continuity of the corporate culture at risk and raises the prospect of a worsening future skills shortage and experience drain. However, nearly half (49 percent) of employees recognize the high value of older workers, but many lack the practices to attract and retain them.

Employers' reasons for not doing more to recruit older workers (in percent)

                                         Global     United States

  Not an urgent issue                      33            51

  No need                                  30            31

  Work too physical                        28            17

  Too expensive                            25            21

  Not as capable                           16             4

  Government regulations/policies          16             8

  Not as valuable                           8             2

  Union policies                            7             5

 

    Source: HSBC Future of Retirement Research 2006

 

 

Dr Ken Dychtwald, chairman of Age Wave and special advisor on global aging to HSBC, said, "HSBC's Future of Retirement research shows that employers have already begun to change their opinions of older people in the workforce. However, we were fascinated to see that many older workers are looking for more flexible arrangements, such as part-time work or even alternating between periods of work and leisure in later life. Moreover, for many, non-monetary rewards -- such as stimulating work, the ability to continue learning, or the opportunity to teach younger workers -- are often viewed as more important than financial compensation."

What HSBC's research reveals about the United States

In the United States, two thirds (66 percent) of people believe they should bear most of their own costs in retirement, with low levels of support for the role of children, the government and employers, combined with support of enforced additional private saving. Nearly half (48 percent) of Americans also believe that people should be able to continue to work for as long as they are capable of doing the job well. This view is endorsed by employers who see older workers as just as productive and employable as younger workers, believing that losing older workers means losing valuable skills and experience. As a result employers are more focused than elsewhere in the world on the opportunities they offer older workers.

Retirement is an active and positive time

Universally, people associate retirement with freedom, happiness and satisfaction. Family, friends and fitness define the quality of later life, not money, and people want to remain active, contributory and involved in some kind of work in their later years. Key to achieving aspirations for later life is preparation, in all its forms, but most notably the flexibility that financial preparation affords. More than ever before, people are seizing the initiative of taking responsibility, yet they still want the support of their government to help them to save, by enforcing additional private savings.

  Individuals' view of keys to happiness in old age (in percent)

                                         Global     United States

  Loving family and friends                67            56

  Keeping fit                              61            44

  Not having to worry about money          42            39

  Staying young at heart                   35            33

  Having a strong religious faith          33            37

  Keeping your mind sharp                  32            38

  Avoiding stress                          28            29

  Having work you enjoy                    25            23

  Having ambitions and dreams              23            19

  Continually trying new things            14            20

 

    Source: HSBC Future of Retirement Research 2006

HSBC believes that governments, employers and individuals cannot afford to shy away from the enormous challenges and opportunities presented by the world's rapidly aging population. However, the bank does recognize that understanding and adjusting to the issues raised by increased longevity will take the global community many years. HSBC's Future of Retirement project is playing a key role in raising awareness among individuals, employers and governments.

Green added: "HSBC remains committed to both understanding the evolution of global attitudes among individuals, employers and governments towards retirement and aging and to leading the worldwide debate on issues associated with increased longevity. HSBC's success over the last 140 years has rested on knowing its employees and customers, their attitudes and ambitions, and acting accordingly."

  For further information log on to http://www.thefutureofretirement.com

  1. Research was undertaken in 20 countries and territories. Interviews

     were conducted with over 21,000 individuals and the attitudes of

     6,000 employers were also canvassed, allowing their views to be

     compared and contrasted. This compares to 10 countries and territories,

     surveying approximately 10,000 people in 2005.

 

  2. "Trendsetters" contrast with the greater numbers of people still in

     traditional, rural, family-based employment, or working in primary

     industries such as mining, fishing or forestry. These trendsetters are

     already taking on the behavior and lifestyles of their peers in Western

     Europe and North America, and there are indications that they will also

     follow the advanced economies in adopting  new forms of retirement and

     ways of living in later life. The attitudes and behavior of this key

     group of individuals and employers may well influence those of the

     wider population in the transitional economies in the future.

 

The Future of Retirement: What the world wants

The HSBC Future of Retirement: What the world wants is the second wave of the largest, most comprehensive research into global attitudes towards aging, retirement and increased longevity ever undertaken. The Future of Retirement was originally launched in 2005 and the first report surveyed 10 countries and territories. In conjunction with Harris Interactive, Age Wave and through the newly announced five year strategic alliance with the Oxford Institute of Ageing, the 2006 research was conducted among some 21,000 consumers and 6,000 employers in 20 countries and territories; UK, USA, Hong Kong, China, Japan, Brazil, India, Canada, Mexico, France, Singapore, Saudi Arabia, Malaysia, Germany, Indonesia, Egypt, Poland, Russia, Turkey and Sweden. Between them, these countries account for 62 percent of the world's population.

The Future of Retirement study is just one of many HSBC initiatives focused on aging and longevity issues. These initiatives will contribute towards the development of a unique and ground-breaking body of knowledge that will continue to help engage and inform individuals, employers and governments worldwide