Savings rates are way too low across the island.
Here’s an uncomfortable truth about Singaporean households: a report by CLSA revealed that almost half of households across the island are saving less than 10% of their monthly incomes, leaving them unable to cope with unexpected financial expenses.
The report revealed that 30% of Singaporean households save less than 10% of their incomes, while an alarming 14% have no savings at all.
Majority of elderly respondents are not saving money during their retirement, as most are focused on enjoying their money during this period. However, a high proportion of residents in their 30s and 40s are also unable to save.
Unsurprisingly, 73% of low-income households are saving less than 10% of their monthly income. However, an unexpected 37% of the top-income bracket is essentially spending everything they earn.
“In our view, as a result of the low savings rate, the high proportion of total wealth in non-liquid assets (eg property, CPF, insurance) and high optimism about future earnings potential, 47% of households do not have enough funds readily available to cope with unexpected financial expense,” stated CLSA.
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