Why did Indians encash savings?

Indian families are feeling the heat of inflation. The expenditure on food items is burning a hole in the pocket. At the same time, covid has dealt a big blow to the earnings of families. This is also affecting the savings of Indian families. Families are draining their savings to meet essential expenses.  India’s Pulse Personal Finance Survey has gives answers to all these questions. The figures are indeed an eye-opener for governments and policy makers.

According to the survey, 67 percent of the families have had to encash their savings in the last 5 years. Whereas 33 percent families arranged expenses from their existing earnings. In the last five years, families have faced pandemic like covid. While the income of families reduced due to pay cuts or stopped due to job cuts, there was a huge increase in the medical expenditure.

Why the savings encashed

Money9’s survey revealed that among 67 percent of people who broke their savings, medical expenses were the biggest burden. About 22.3 percent people have broken their savings to meet the treatment expenses. At the same time, 15.2 percent people have lost their savings due to loss of job or stoppage of earning. Apart from this, the increasing cost of education has also forced people to break their savings. About 11 percent of the families have had to break their savings to meet the education expenses. Besides this, marriage has also become a reason for breaking savings. 8.2 percent of Indian families have depleted their savings to meet wedding expenses in the last 5 years. Approximately the same number of families, i.e. 8.2 percent, have decided to break their savings to repay loans. In the Corona crisis, the earning member of many families lost their support. 2.3 percent families have lost their savings due to the death of the earning member of the family.

80% families fear job loss

According to the survey, 24 percent of employed people always have a strong fear of losing their job, apart from this, there are 56 percent of people who have a fear of losing their job but not too much. That means 80 percent of the people of the country are living in fear of losing their jobs. There are only 20 percent people who have no fear of losing their jobs.

56% families have only 2 months of savings

According to the survey, 24 percent of the people who are most afraid of losing their job say that they have enough savings that they can survive for 6 months if they lose their job, similarly, 56 percent of the people who are not very afraid of losing their job have savings to survive without a job for 2-3 months.