Sense of Financial Freedom Low in India: HDFC Life and Value Notes

The inaugural Life Freedom Index report launched by one of India’s leading life insurers ‘HDFC life’ in association with a research firm ‘Value Notes’ reveals that Indian consumers’ sense of financial freedom is low and is yet to reach a state of financial enlightenment.

The Life Freedom Index comprises of five factors like financial awareness, financial liberty, level of financial planning, sufficiency of financial planning, financial adequacy. One of the officials of HDFC Life said that the index report clearly shows that Indian consumers have the appetite for financial planning, but are not doing it well enough.

The survey was conducted among 1,600 Indian consumers across 11 cities among the wage earners (aged 30 to 45 years), urban investors (above 45 years), young individuals (20 to 30 years) and urban women (aged 25 to 40 years). The research survey found that, 32% of urban Indian consumers rely on ‘self’, 35% on relatives and friends and 27% seek professional help for financial planning.

The report says that, the young Indians are low on financial awareness and are not completely aware of the merits of goal-based planning. Though their awareness of the ‘expected events’ like child’s education, health expenses and retirement (25.8 on a scale of 0-100) is poor, the knowledge and awareness of the financial products (55.2 on a scale of 0-100) is higher.

These young Indians are not more concerned with the ‘unexpected events’ like Wage Earner’s death which was factored in by 16 (urban women) to 36 % consumers. An external event like inflation was a concern among 30 (urban women) to 36 % consumers.

The official of Value Notes said that Indians might plan for a wedding in the family, but they are low on awareness of macro-economic factors like inflation. Thus, Indian consumers are chalking out financial plans, despite limited knowledge about financial goals and various investment options available in the country.