Urban India raises focus on savings, cuts down luxury expenses due to COVID-19
New Delhi, Jan 19 (Mayank Nigam) Urban India has increased savings and investments, and cut down basic and luxury expenses significantly due to the outbreak of COVID-19 pandemic, according to a survey done by Max Life Insurance. Urban India continues to grow anxious about financial security, fear of COVID-19 infection, untimely death of breadwinner, and cost of COVID-19 treatment, Max Life’s India Protection Quotient (IPQ) 3.0 revealed.
Term insurance ownership registers 4 percentage point increase during Covid-19 pandemic; however, conversion to ownership of term insurance still under 50 per cent, it said. Around 4,357 respondents were surveyed via face-to-face interviews with adequate safety measures across 25 cities comprising six metros, nine Tier I and 10 Tier II cities, it said. Urban India has grown more anxious about financial security and preparedness in the last one year, the survey said, adding, financial anxieties related to COVID-19, and ability of current earnings to cover expenses have emerged as top concerns for them. ‘IPQ 3.0 brought to light that in comparison to pre-COVID-19 times in IPQ 2.0, urban Indians are prioritizing savings and investments over discretionary spending. ‘Savings and investments increased from 41 per cent (IPQ 2.0) to 50 per cent, whereas basic expenses decreased from 44 per cent (IPQ 2.0) to 41 per cent and luxury expenses decreased from 14 per cent (IPQ 2.0) to 9 per cent,’ it said. Savings objectives also saw some change during the pandemic, it said.
While only 35 per cent saved for untimely death of breadwinner earlier, a higher 41 per cent saved for it now and 62 per cent saved for old age security, as compared to 57 per cent earlier, it added. With a sense of increasing worries and reducing security, IPQ 3.0 saw urban Indians becoming more proactive about financial planning and overall health and fitness. 69 per cent respondents said that they’re proactive about financial planning and they believe in saving more than spending respectively, it said. Even with a vaccine in sight, ‘Digitally Savvy Urban Indian’ continues to feel attitudinally less secure at 51 per cent, it said.