Singaporean millennials have the highest levels of financial resilience, and, while confidence and optimism are high across all generations, many people including wealthy individuals still lack a plan of action. In addition, trust and emotion were important when Singaporeans made financial decisions.
These were the findings of the “Asia Financial Resilience Index” released by Sun Life recently which examines the financial behaviours and beliefs of individuals across the region and the barriers they face in building long-term financial security. The Index is a report based on a survey of 8,000 people in eight markets: Singapore, mainland China, Hong Kong SAR, India, Indonesia, Malaysia, the Philippines, and Vietnam.
Other findings of the survey include:
- The role of trust, emotion in financial resilience
Nearly half of Singaporeans (42%) reported that trust and emotion played a key role for them in making financial decisions. Financial institutions were the most trusted sources of financial information, followed by friends and family. Social media is a common source of financial advice (37%), but few have a high degree of trust toward it (10%). Over a third (39%) of Singaporeans want to educate themselves more about personal finance yet are reluctant to ask for help – only 22% currently seek professional help or advice in managing their finances.
- Being wealthy does not automatically build financial resilience
The survey of 1,000 households in Singapore found that even the wealthiest respondents had gaps relating to preparedness, underestimating expenditure and lack of long-term financial planning. High-income respondents are almost as likely to exceed their monthly budgets as lower-income respondents (19% vs 22%). The survey also found that lower-income respondents score better (60%) than those in the high-income category (52%) in being able to cover short-term financial obligations while saving for long-term goals.
- Millennials the most resilient generation in Singapore
The survey found that millennials are the most financially resilient generation. They are more confident than older age groups when it comes to their ability to meet long-term financial goals (75% vs 68%) and more resilient in managing their month-to-month finances (71% vs 67%). They also scored higher in financial literacy compared to their Baby Boomer counterparts (52% vs 46%).
Millennials also showed high financial resilience in managing their finances month to month compared to older generations (71% vs 67%). Despite this, only 44% of millennial respondents have a financial plan beyond the next one year, which suggests they risk falling into the same planning trap as other generations.
- Confidence outstrips preparedness
The Index found that across Asia confidence outstrips preparedness when it comes to long-term financial goals. In Singapore, 70% of respondents are confident in meeting their long-term financial goals (compared with a 69% Asia average) yet only 44% have a financial plan beyond one year ahead (compared with a 40% Asia average).