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Schroders: Only 23% prepared for retirement

Schroders: Only 23% prepared for retirement

Recently, Schroders published their latest global investment trend report. The survey indicates that global willingness to invest has rebounded and 70% plan to invest in securities markets in the coming year. Schroders' global survey also indicates that the investment objective of as many as 58% of Taiwanese investors is investment towards retirement pensions. This is higher than the global average of 46% and Asia's average of 39%. However, the actual percentage of Taiwanese investing in retirement pensions is 23%, far below the global average of 44% and Asia's average of 36%. This report reveals that, though Taiwanese recognize the urgency of retirement pension preparation, retirement education, contribution rates, and investment vehicles designed for retirement purposes remain clearly inadequate.

Furthermore, the survey discovered that the average investment holding period of investors is relatively short and asset allocation tendencies are conservative. The average age of Taiwanese respondents was 41.9 but their average investment holding period was only 2.9 years. Compared to the length of time until retirement age, this investment holding period duration is far from adequate.

Schroders CEO Francine Wu reminds investors, due to significant extension of life expectancy, if they wish to have ideal retirements such as achieving an income replacement ratio of 66%, they must allocate 15% of wages for 40 years at a real ROI of 3% annually. Thus, she suggests strengthening retirement pension preparation awareness and enhancing labor pension incentives to encourage the public to increase retirement pension allocation and change short term trading practices.

Regarding global investment trends, Schroders Executive Vice-Chairman Massimo Tosato indicated that 2014 will be back on track for growth, more than 80% of the public plan to increase or maintain the level of present investments in the next 12 months, and 70% of investors plan to invest in securities markets in the next 12 months. In contrast, only 18% of investors are bullish on bond markets and 8% plan to retain cash on hand. Regarding Taiwanese investors, willingness to invest overseas remains high but investors are even more bullish on Taiwanese securities with the percentage of bullish investors jumping from 36% in 2013 to 55% in 2014.

Regarding investment regions, degree of optimism for developed countries rose significantly compared to last year, and 27% of investors worldwide view the performance of Western European markets as most promising in the next 12 months. In contrast, only 10% were optimistic regarding these markets last year (2013). A further 31% of these investors are bullish on the performance of the US market which surpasses the optimistic percentage of last year’s survey. However, in the next 12 months, the most promising region remains Asia with 39% of investors, though this is lower than 2013’s 46%.

Updated : 2021-05-12 16:21 GMT+08:00