On average, 81% of respondents in Asia said that they provide regular support to their family (led by Indonesia, India and Malaysia), according to HSBC's new "The Power of Protection" study, "Facing the future".
The study also showed that parents in the Middle East (79%) and Asia (56%) are financially supporting children into adulthood, with 51% of Asia respondents supporting a child aged over 30. Over two-thirds (67%) of them are supporting their parents.
Education is the area where many Asian parents (64%) are providing financial support, while over two fifths (41%) are helping their grown-up children with everyday living costs such as utility bills, groceries and home repairs. They are also helping with medical and dental care (30%) and even holidays (25%).
The extent of financial support people give their families affects their own long-term financial planning. When asked to choose between their own retirement fund and financial support for the family, nearly three-quarters (71%) of Asian respondents say they would prioritise paying for their children’s education and 59% of them would prioritise parents’ healthcare.
Mr Bryce Johns, Group Head of Insurance at HSBC, said: “Strong family ties are an important part of many Asian cultures and this can translate to financial support for family members beyond levels traditionally seen or expected in the West. This long-term financial dependency puts those in this situation in a challenging position, as they need to have enough money to support family members as well as their own future needs. With aging populations and rising old-age dependency ratios in Asia, these people may find themselves inadequately prepared for their own retirement and health care.”
With greater longevity, Asians will need to plan to provide for their parents and their own needs in old age for a much longer time. According to the Organisation for Economic Co-operation and Development, life expectancy in Asia was 73.7 years on average in 2015.
“Demographic trends show that many people in Asia will have to bear greater financial responsibility compared to the rest of the world in the coming years. It is therefore even more important for families to have a financial plan in place to balance competing priorities, achieve their personal ambitions and help their family become more financially secure in the future,” Mr Bryce said.
The cost of caring
Half of Asian respondents said they are spending less on themselves to be able to spend more on their family. Over a fifth (22%) of those assisting their family said they had to withdraw funds from their own savings and investments to provide this support.
The survey also showed that the financial pressures of caring for multiple family members cause anxiety. Nearly half (49%) of the respondents supporting someone in their family said they feel stressed when they think about the future, and 23% of Asia respondents who are giving regular financial support believed that if they developed a long-term illness or disability, their family would not manage at all financially.
Despite these worries, 58% of Asia respondents said they do not have insurance that would pay them a regular sum in the event of a serious illness or accident, and over half (56%) said they do not hold products that would pay out a lump sum to take care of their family or beneficiaries in the event of death.
Mr Bryce said: “In Asia, we have seen customers rely on insurance for a variety of wealth needs, particularly savings and investment. However, as a tool to manage risk and offer protection, insurance still has significant room for take up in the region.
“We expect that, with family as their top priority, people in Asia will increasingly look to insurance for their protection needs to enable their families to maintain their quality of life and achieve their aspirations no matter what the future brings.”
The “Power of Protection” is an independent consumer research study into global protection needs and trends, commissioned by HSBC. This report, “Facing the future”, is the third in the series and represents the views of 13,122 people in 13 countries and territories: Argentina, China, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, UAE, UK and USA. The findings are based on a survey of those aged at least 25 and from a nationally representative online sample in 12 countries/territories and a nationally representative face-to-face sample in the UAE.