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Inflation, rising healthcare costs key threats to financial goals, say Singapore residents in poll
SINGAPORE – Rising inflation, an economic slowdown and soaring healthcare costs are the three key factors that Singapore residents say will hinder them from reaching their financial goals, a survey found.
Inflation was identified as the key threat to their savings plans by almost seven in 10, or 68 per cent, of the 1,037 Singapore residents polled. This figure is above the regional average of 64 per cent.
Six in 10 (60 per cent) of the survey participants said an economic slowdown made it harder for them to save, while about five in 10 (53 per cent) said higher medical cost was a key risk.
The Manulife Asia Care Survey 2023 released on Wednesday found that just over half of those polled were confident of saving for emergencies (52 per cent) and maintaining their current lifestyles (51 per cent).
The survey was carried out on those aged 25 to 60 in seven markets across Asia, including Hong Kong, mainland China, Indonesia and Vietnam. It was done between late December 2022 and early January this year.
Less than half of the respondents in Singapore were confident about saving fully for retirement (43 per cent), buying a home (42 per cent) or having enough for their medical needs (41 per cent).
In Singapore, 63 per cent relied on cash and bank accounts to save for their retirement. This is well above the regional average of 53 per cent.
The poll found that savings or endowment insurance, along with returns and recurring income from non-fund investments (both 20 per cent), was a distant joint-second to cash.
“The over-reliance on cash as a savings tool in Singapore exposes Singapore consumers to inflation risk. Inflation eats away at the value of cash savings. So, it’s important to find avenues that offer compounding returns,” said Manulife Singapore’s chief executive Khoo Kah Siang.
The survey, which is into its fourth year, found that the top personal finance goal for Singapore residents is to retire earlier, but it also found that the majority have not made plans.
Almost two-thirds or 63 per cent polled in Singapore said saving for retirement was the top personal finance goal, more so than the regional average of 49 per cent.
Respondents expected to retire at age 62, but 65 per cent of those polled said they did not have a plan in place even though the average life expectancy in Singapore is currently 83.5 years.
Of those aged 25 to 35, only a quarter were preparing for retirement, while 44 per cent of those aged 45 and above had retirement plans.
A mere 26 per cent of those polled said they had set aside funds for retirement.
The respondents were people who either owned or intended to buy insurance.
In all, more than 7,200 individuals took part in the poll.
As to why most of those polled were not setting aside funds for retirement, the survey attributed it to them having other financial priorities. These include having to save up for emergencies, maintaining their current lifestyles and having enough for medical care.
In particular, 46 per cent of the younger respondents who have no children said buying a home took priority, more than double Singapore’s average of 21 per cent.
Source: https://www.straitstimes.com/business/s-pore-residents-see-inflation-higher-healthcare-costs-as-key-risks-to-their-financial-goals-poll