Indian families at financial risk on low saving

New Delhi, Feb 22 (UNI) Income in Indian households may have risen sharply in the last few years due to strong economic growth, but they are still at financial risk due to poor saving habits, shows a survey.

''Nearly 96 per cent of households feel that they cannot survive for more than one year on their current savings in case of loss of major source of household income,'' Rajesh Shukla, senior fellow at the National Council of Applied Economic Research (NCAER), told reporters today.

However, 81 per cent of households save, but have traditionally used bank accounts as savings instruments and avoided equity investments or insurance due to aversion to risk, or lack of awareness.

''51 per cent of them deposit their savings in banks and 36 per cent simply keep their savings at home,'' said Shukla.

The survey conducted by NCAER with Max New York Life covered 63,000 Indian households across both rural and urban India.

Although 78 per cent of Indians are aware of insurance as a concept, just a fourth of Indians are covered by insurance, he said.

''India is also a country of optimism,'' said Shukla. ''Most of them feel that nothing will happen to them and they don't need any safety net.'' The study outcomes will help us further sharpen our understanding of the Indian life insurance market, its potential and the varying needs of customers across India. It will also help us in prioritising geographical expansion and product development, Max New York COO Sunil Sharma said.

UNI