Well settled, with higher savings rate

Well settled, with higher savings rate

This week’s segment looks at households where the chief wage earner has the same educational and occupational profile as earlier—is married, has young children and lives in a joint family, i.e. segment C4. Next week we will take up the same profile, but in a nuclear family household.

Also See Indicus Analysis Research (Graphic)

This segment is formed by households where the chief wage earner is in his middle years, is married with young children, lives in a joint family and is a well-educated professional or skilled worker.

Also Read Previous articles in the Indicus Consumer Spectrum Series

Comprising 1.5% of the total urban population, C4 has close to 900,000 households and a population of nearly five million—a large segment indeed. With the middle years dominating this segment, most chief wage earners are in the 35-54 years age group. The chief wage earners are not new migrants to cities; most would be those who moved in their youth or whose families migrated in earlier decades. As the focus of the segment is on joint family households with young children, these households are generally larger in size than others in the C segment—more than 70% have five members or more. While usually these are seniors, parents, who could also be working while living with their children, there are also possibly relatives who come to study or work in the city. Some 46% of these households have two or more earning members.

Also See Profile of C3 segment (Graphic)

Income in these households is around Rs2.85 lakh per year at the median level, and the savings rate is quite high at 24%. These are families that are well settled in their lives and careers, and more than 60% own the houses they live in. Just 20% of these households have more than two minors. Most spouses are home-makers and only 17% are employed, fitting the traditional joint family picture.

This segment is relatively well educated in the SEC C profile. More than 60% of the chief wage earners have completed their degrees while 21% have postgraduate qualifications; the rest have finished schooling and have gone in for diplomas or certificates in technical skills. With a variety of educational achievements, the job profiles are varied. A large part of the chief wage earners are self-employed—this could mean professionals such as doctors, lawyers, chartered accountants, etc., or those with vocational skills and who have their own shops or trade or transport business.

Education, health, social work and related activities form the largest share in this segment, while wholesale and retail trade come in second. In fact, this sector of trade forms the largest share in this segment compared with other C segments. These are often family-run businesses, where the children, even when they opt for college education, return to take over the reins from the parents. Public administration is the third most common sector of employment—government jobs, especially in state capitals, make up a significant share of employment.

Households with seniors and minors spend considerable amounts on medicine and education, both of which take up a greater share of the budget as health costs and school and college fees have been rising significantly in recent years. To some extent, this is fuelled by a desire for a better lifestyle and future; parents are willing to spend on a private English-medium schools and on tuition classes so that their children have a stronger base to advance in life. These are, therefore, families that would benefit from medical insurance plans, child education schemes, etc.

By this stage in life, most of the families have bought their homes and there would even be some looking to purchase a second affordable home as an investment. Some 14% of the C4 households earn more than Rs10 lakh annually; they can afford to move ahead steadily on further asset acquisition.

This series is brought to you by research firm Indicus Analytics Pvt Ltd

Graphics by Shyanal Banerjee/Mint and Ahmed Raza Khan/Mint