Over 50% of Pakistan’s emerging affluent class is storing cash at home and this way they are losing opportunities to grow overall wealth by not investing in the economy, according to a new study of Standard Chartered.
The finding was part of a survey titled “Emerging Affluent Report – The Race to Save”, carried out by an independent research agency called GlobeScan.
The survey included a sample size of 8,000 participants in eight countries including India, Pakistan, China, Hong Kong, Singapore, Taiwan, South Korea and Kenya to throw light on what defines the next generation of savers across some of the world’s most promising economies.
On average, 11% of the emerging affluent class in the eight countries store cash at home, whereas India’s tally stood at 15%. Under this head, Pakistan lags behind by a great margin.
Moreover, according to the study, only 4% of Pakistan’s population use advanced savings methods such as mutual funds, stocks/equities, fixed income and pensions compared to India’s 24%. The average of eight countries is 17%.
However, when it comes to using basic savings methods like savings accounts, time deposits/fixed term deposits and regular deposit savings plans, Pakistan and India are close to each other, standing at 38% and 42% respectively. The average of eight countries is 43%.
The other notable feature of the survey is that the emerging affluent class in both South Asian countries saves more for the education of their children, relegating home ownership along with savings for retirement.
“The top concern for Pakistanis is the education of their children, so we have to provide products that can cater to their needs,” said Standard Chartered Head of Wealth Management Muslim Reza Mooman while commenting on the survey’s results.
Participants of the survey from Pakistan were all graduates between the ages of 25 and 55 who earn over Rs40,000 per month while the upper limit is Rs500,000 per month.
Nevertheless, the survey indicates that not only Pakistan, but the emerging affluent class of all countries is losing much on savings and investments.
“The emerging affluent survey has given us interesting insights into the savings habits of people in Pakistan,” said Standard Chartered Pakistan Head of Retail Banking Shezad Arif.
“On average, the country’s emerging affluent saves around 14% of their income every month. Financial institutions should take a broader approach and introduce innovative wealth management solutions to help this segment achieve its savings goals.”
