Financing Retirement Provokes Worry Across the Globe

New York, NY -- Who's worried about how they'll fund their retirement? Just about everybody. This, according to marketing research firm Ipsos-Reid, which asked over 10,000 people in 20 countries how much they worry about having enough money to support them when they retire, and what sources of support they expect to rely upon in old age.

The good news? The closer people get to old age, the less they worry about how they'll finance it. The bad news? If you don't--or don't know how to--plan for your retirement while you're young, you'll probably spend a good chunk of your life fretting about getting old.

More than half (56%) of people aged 55 and older said they are worried about how they will support themselves in their retirement, compared to 65% of people aged 18 to 34, and 68% of people aged 35 to 54, Ipsos-Reid found in its 20-country study.

Source: Ipsos-Reid

Age was one factor in the findings. Income was another.

"The more money people have, the more they expect to rely on personal savings," said David Scowcroft, a senior researcher in the company's financial services practice. "The poorer people are, the less hopeful they are that their own savings or a private pension will be there when the time comes, and the more they expect to rely on family."

Of the four major regions (North America, Latin America, Europe, and Asia-Pacific) researched, people in Latin America were the most stressed about old age security. Latin Americans put the greatest emphasis on children and relatives as a source of future financial support.

Scowcroft noted that having the tools and resources to plan for retirement can do a lot to ease people's anxiety.

"What's most important, I think, is that people feel that they're doing the best they can, with whatever they have", Scowcroft said. "Having some type of savings plan gives people a tremendous sense of reward and control, which in turn reduces their anxiety. When you don't even have access to tools and resources--and, ideally, someone to guide you--old age can look very scary."

"While these findings may appear to be intuitive, the implications are not, apparently. If financial firms--banks and brokerages in particular--were really listening to their customers' concerns about the future, they would be focused on generational-selling to family networks rather than cross-selling to individual customers."

Added Scowcroft: "Firms should think of the opportunity as `friends-and-family' networks. Telecom companies `get it.' Now the financial services industry should follow the lead."

"There is a massive opportunity in the middle market for `micro' estate planning--wealth protection, asset growth, tax savings, and multi-generational wealth transfer--collectively Progressive Retirement Planning. Most financial firms are focused on the `mass affluent' individual to the exclusion of larger, more receptive audiences. Our data suggests that there are strong opportunities to build family-based, multi-generational relationships."

There are many advantages to a `Gen-selling' strategy, he said:

• Provides a broader opportunity to gather assets;
• Raises the barrier to exit for `in-network' members; and
• Products cross-sell organically based on need within the family network.

"It seems obvious, but most individuals do not live in isolation. Most live within multi-generational family units. Understanding and leveraging these financial dynamics is likely to produce exceptional results," Scowcroft concluded.

Source: Ipsos Global Express

These international survey research data were collected via Ipsos's Global Express, a quarterly international omnibus survey. Fieldwork was conducted between November 19 and December 17, 2001. Data are based on individual surveys taken with a random sampling of adults (18+) across 20 countries. The target sample size in each country was 500, except for the United States where 1,000 interviews were conducted. Within each country, the survey results can be said to be within 177 4.5 percentage points of what they would have been had the entire adult population been surveyed; 177 3.1 percentage points in the United States. In 13 of these 20 surveyed countries, the samples provide full national sample coverage, while the remainder provide quasi-national representative samples of selected urban and rural areas or an urban-only sample of key cities. For all national samples, the data were collected via randomized telephone interviewing, with the one exception of Poland where in-person door-to-door interviewing was used. Door-to-door interviewing was also used in the quasi-national samples in Argentina and Turkey, as well as the urban-only samples in Brazil, China, Colombia, Mexico and South Africa where the sample coverage was limited to the largest cities.

For more information on this release, please contact:

David Scowcroft(212) 584-9272