Giles Powdrill writes:
Since 2004 The Futures Company has worked with Aviva, one of the world’s largest insurance companies, on an annual survey focussed on understanding consumer attitudes to saving and investing. In total, more than 100,000 people have taken part in the survey since its inception. Geographically, the scope has grown year on year from 11 countries in 2004 to the 25 covered in 2008.
2008’s global survey was also topped up by an additional omnibus survey of key tracking questions in six markets, to understand how attitudes were changing as the credit crisis intensified, in late October 2008.
The results formed the basis of a recent speech given by Amanda Mackenzie. Aviva’s Group Marketing Director, at Chatham House (opens in pdf). To summarise some of the main findings:
Short termism – In 2008, the majority of people surveyed, in every market, said that the short term (within the next 5 years) was the most important timescale for them when thinking about savings and investments and the importance of this short term context overall has been a growing trend since the survey began.
Financial vulnerability – People feel financially exposed. The 2008 survey revealed that across the markets surveyed only one in four people felt that they had enough savings or investments to cope with the unexpected. Although this sentiment was felt most strongly in many of the Central and Eastern European countries, the omnibus research in October showed that feelings of vulnerability in more economically mature countries like the US and Germany have increased noticeably over the preceding nine months.
Aversion to risk – Less than a third of those interviewed in 2008 agreed that they were prepared to accept a higher level of risk for their savings in return for a higher possible return and although this figure had remained consistent across the five years of core research, the omnibus survey showed evidence of this risk aversion strengthening in the more mature economies since the credit crunch took hold. The research has highlighted consistently that when people think about financial returns from their savings they tend to prefer products which offer safer or guaranteed options over those which offer the highest or most competitive returns.
Barriers to saving – The greatest reported barriers to saving more have consistently been lack of affordability and existing debts, however lack of trust in financial institutions as a determining factor has risen dramatically over the course of this year. For instance only 8% of respondents in the US cited it as a barrier in Q1 2008 but this had then risen to 25% by Q4. Over the same period it rose from 15% to 27% in Ireland and from 13% to 22% in the UK.
Retirement concern – In almost every country surveyed the majority of pre-retired people said that they were worried that they wouldn’t have enough money when they retire to provide an adequate standard of living, and this has been the case since the survey began. However, significantly fewer people in most countries said that they were actually regularly setting aside money for use in retirement (despite also acknowledging that saving or investing regularly was the most practical way to secure a comfortable retirement). A mismatch between anxiety and action which creates some potentially worrying pension provision gaps.
Working later – One response to this potential lack of retirement provision, from a consumer point of view at least, may lie in simply working until later in life. In fact, rather than seeing this an unappealing prospect, in 2008 the majority of pre-retired people agreed that they would like to work, either full time or part time, after the usual retirement age. There was considerable geographical variation in answering this question though; the more established Asian markets such as Hong Kong, Singapore and Taiwan expressed the greatest desire to carry on their employment into their later years whilst those in Continental Europe (France, Germany, The Netherlands and Belgium) were least enamoured with the idea.
Countries covered in the 2008 research: Hong Kong, Singapore, Taiwan, China, Russia, Ireland, India, Australia, Romania, USA, Italy, Lithuania, Turkey, UK, Sri Lanka, Poland, Canada, Spain, Czech Rep, Malaysia, Hungary, Belgium, Netherlands, Germany, France.
A summary report of the key findings from the research has now been published and is available for download on Aviva’s website.