SG’s financial health declined to record low for 2nd consecutive year

SINGAPORE: A new OCBC survey suggests that the financial health of Singapore people has declined for the second consecutive year and has reached an all-time low. The report also found that poor economic conditions have also prompted people to postpone their retirement plans.

OCBC interviewed 2,000 workers aged 21 to 65 in August as part of this year’s Financial Wellness Index. Singapore scored 60 points this year. A set of 24 indicators was used to measure financial wellness, and Singapore scored a much poorer result in 15 of these indicators as compared to last year. The “retirement planning” indicator suffered the greatest decline, falling from 47 points last year to 40 points this year. 79 per cent of Singaporeans surveyed have not made a retirement plan or are not following the plan.

People are also delaying the age at which they start planning for retirement. Among them, respondents in their 50s plan to prepare for retirement at 60, two years later than last year’s survey. Respondents in their 20s started planning for retirement on average at 42, eight years later than recorded in the previous survey.

In addition, only 42 per cent of respondents said they have enough funds to meet their family’s financial needs for at least one year in the future, a decrease of 8 percentage points year-on-year.

Due to the uncertain outlook, the number of respondents who have made investments this year also decreased by 6 percentage points, reaching 79 per cent. The average return on investment for local investors also halved to 0.4 per cent.

However, the continued high-interest rate environment, high inflation and higher consumption taxes have prompted more people to repay their debts. 64 per cent of respondents said they can pay their home loans on time, an increase of 4 percentage points from last year. There are also 3 per cent fewer respondents with unsecured debt, as compared to last year.