Many don't know if they've enough for future: Survey

Retirement planning is a key concern for Singaporeans but many do not know if they have enough, according to a new survey.

The report, released yesterday, said that 39 per cent of respondents are not positive about their retirement preparations, suggesting a lack of savings and confidence in the future.

The online survey, which polled 1,008 people here aged 40 to 60 last November, noted that 56 per cent of people who start retirement planning do not seek any form of advice.

Respondents also feel less prepared financially for retirement than they do about their future health and wealth aspects.

Only 36 per cent believe they can retire comfortably with their current savings and investments, while 30 per cent expect to downgrade their lifestyle and habits after they quit work.

The survey, which was also carried out in Hong Kong, China, India, Indonesia and Taiwan, found that 38 per cent of respondents here are worried about their ability to meet medical costs when they retire, while 32 per cent are not sure how much buffer they will need for healthcare expenses when they retire.

The survey was commissioned by DBS Bank and Canadian insurer Manulife, and the two yesterday also announced details of their new bancassurance partnership.

The partnership, which came into effect on Jan 1, takes place after DBS' previous relationship with British insurer Aviva expired on Dec 31.

It was announced last April that DBS Bank would get US$1.2 billion (S$1.7 billion) from Manulife in a 15-year distribution deal for its insurance products in Singapore, Hong Kong, China and Indonesia.

DBS will offer Manulife products across protection, retirement and wealth management segments.

Manulife chief financial officer Stephen Roder said yesterday that the deal is a sound investment for the insurer and that it is confident of the returns it will get.

He added: "When it came to agreeing to this deal with DBS, we had to consider the interest of our shareholders, and be happy that the returns we expect to make on this deal over the 15 years satisfy the normal criteria that we have for any major transaction."

He expects earnings to come in after the first year, because of the way a policy works, as "the income stream from that policy will typically accrue over a period of time". This means that it takes some time for new sales to turn into earnings.

Both firms will also co-fund up to $100 million over the next 15 years. The money will be invested in digital technology and innovation.

DBS regional head of bancassurance Richard Vargo said $10 million will be spent this year on initiatives that include developing retirement-planning tools for Singapore and the region, and more consumer research.

DBS consumer banking and wealth management head Tan Su Shan added: "Manulife was willing to work with us on our digital innovation and our client centricity. When you offer a retirement or insurance product, it (has) to really fit in with what their life needs are."

rachaelb@sph.com.sg


This article was first published on January 6, 2016.
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