BankBazaar’s Aspiration Index also shows Indians prioritizing health over wealth
While buying a house continues to remain the top priority, there is a shift towards aspiring for early retirement
India is a country driven by aspirations. Not only do the ambitions of the growing middle class drive the economy of the nation, growing aspirations for a better life also encourages behaviours that ultimately result in greater productivity. The second edition of BankBazaar’s Aspiration Index shows that, by and large, Indians across demographics have their aspirations firmly in place. However, the study also reveals that there is a gap between the aspirations and the readiness of young Indians to achieve them.
The study used quantitative research, surveying 1,828 salaried men and women across 12 cities. The last edition analysed millennials between the ages of 25 and 35. This year, it has been expanded to include the working population between the ages of 22 and 45. According to the survey, the national aspiration index stands at 86.9, which indicates that Indians, in general, are clear about their aspirations as well as their readiness to achieve them.
Although this is a drop from last year (87.4), the change has not been very drastic despite widening the age group of the respondents. The survey showed that individuals on an average saved 38% of their income, an increase from 2018, where they saved one-third of their salaries.
The survey also tracks how close people are to achieving their aspirations. While a particular aspiration might be of high importance, people might not be adequately prepared to fulfil it. It defines this as the ‘aspiration-readiness gap’, which is used to gauge how far someone is from a certain goal.
Non-metros take lead
One significant change marked by the survey this year was non-metros outscoring metros on the aspiration index. Last year, Chennai had taken the lead, whereas this time, Bhuvaneshwar has emerged at the top with an aspiration index of 90. But for many, this trend is not particularly surprising.
“The internet and smartphone explosion has changed India. There was never a dearth of talent but the lack of exposure and non-availability of information, appropriate education and work opportunities forced non-metros to have limited aspirations. The scenario has changed in the last eight to ten years. So it is that subdued Indian population of non-metros which is outscoring metros," said Shilpi Johri, certified financial planner and founder of Arthashastra Consulting.
The non-metros as a whole have progressed on the aspiration index from 85.9 in 2018, to 87.4 at present. Metros, on the other hand, have seen a slight fall by dropping from 86.9 last year to 86.6 this year.
Health over wealth
According to the survey, health is the number one priority for the majority of respondents, followed by relationships and wealth. “As life spans increase, the implications of lifestyle diseases also increase. So, people are trying to achieve the golden mean between work and exercise to ensure a healthy life. So, from this perspective, health is the aspiration that helps you fulfil all other aspirations, and hence is looked upon as the most important one," said Aparna Mahesh, chief marketing officer, BankBazaar.
Following a healthy lifestyle and building stronger bonds with one’s family takes precedence over more materialistic goals. The widening of the respondent base to include both younger and older respondents in the study is the reason for this shift compared to last year, when wealth creation was at the top of the list of priorities, while health came second and relationships came in fourth.
“This is certainly a healthy state of society. It is a symbol of evolution. When people emphasize non-monetary aspects of life more than monetary, then we can assume that they have passed the survival stage of life. Also, it will positively impact the finances, because happy and healthy people will be more productive and will consequently earn more," said Johri.
However, despite health-based goals being regarded as extremely important by the respondents, the aspiration-readiness gap is fairly high. The aspiration-readiness gap is highest in the health category at upwards of three points for several goals, and is also high at three points among early jobbers, who know what they want, but have a long way to go in terms of achieving it. The gap here is measured in points by subtracting the perceived preparedness from the importance of the aspiration.
Retirement in sight
While buying a house continues to remain the top priority, as it was in the last edition of the study, there is also a shift towards aspiring for early retirement, with 87.1% expressing the desire to retire early, and 85% stating that they were prepared for such a move.
“While the early jobbers are laid back about retirement planning, it is still there on the horizon for them. The real investing starts at around 28-29. By that time, people are settled in their careers and begin planning for the long run in terms of a family and assets of their own. So, retirement planning becomes a part of the overall planning," said Mahesh.
However, according to the BankBazaar’s data, the average retirement corpus people are looking to accumulate is ₹1-2 crore, which is too low, considering inflation, rising healthcare costs and increasing life spans.