90% of Indian parents willing to prioritise child's overseas education over own retirement, says HSBC survey

A growing number of Indian parents are pursuing international education for their children, despite the financial strain it poses on their retirement savings, according to HSBC’s Quality of Life Report 2024. 

The report, which surveyed over 11,000 affluent respondents worldwide, highlights that 90% of Indian parents intend to fund their child’s overseas education, with costs sometimes consuming up to 64% of their retirement savings.

The report shows that 78% of Indian respondents either have a child studying internationally or aspire to do so. Popular destinations include the US, UK, Canada, Australia, and Singapore. However, as the cost of living rises and inflation impacts savings, funding these educational ambitions has become a critical concern for many families.

For many parents, financing their child's education involves more than just personal savings. While 53% of Indian respondents have an education savings plan, 40% expect their child to take on student loans, and 51% are hopeful for scholarships. A significant 27% would even consider selling assets to cover the costs. On top of financial concerns, parents must also navigate the complexities of course selection, university admissions, and other pre-departure preparations, adding to their stress.

Sandeep Batra, Head of Wealth and Personal Banking at HSBC India, commented on the findings, stating that planning for a child’s international education requires both financial preparation and logistical support. He noted that services can assist families in managing these challenges, helping them secure their financial stability while supporting their child’s academic goals.

The report also points to a shift in preferences among Indian parents, with many now considering regional study destinations like Australia and Singapore. This intra-regional mobility trend is growing as Southeast Asia becomes an increasingly attractive option due to its lower cost of living and expanding career prospects. The region's rise in international schools and universities is providing families with more opportunities to explore education options closer to home.

Beyond education, the report delves into the broader financial concerns of affluent Indians. Rising living costs, inflation, and healthcare expenses are top worries, with many prioritizing financial security and family support. About 45% of respondents ranked supporting their family financially as a primary goal, while 41% focused on securing wealth for their future, and 38% highlighted planning for retirement.

Additionally, 71% of affluent Indians feel financially fit, with 62% noting an increase in liquid assets. Interestingly, 58% of respondents plan to continue working post-retirement, and legacy planning is gaining traction, with 86% expressing interest in consulting wealth management advisors to ensure smooth wealth transfer during their lifetime or upon passing.

HSBC’s report underscores the growing need for careful financial planning, particularly for parents looking to balance international education expenses with long-term financial goals. As more Indian families navigate the challenges of funding overseas education, preparing early, seeking expert advice, and fostering financial literacy in children will be crucial steps to securing their future.