[ad_1]
Mon, Nov 23, 2020 – 5:37 pm
COVID-19 has put pressure on the financial health of Singaporeans, affecting their ability to pay off their home loans and reducing their passive income, according to the latest OCBC survey.
OCBC’s Financial Well-being Index, which launched in 2019, has dropped to 61 this year, from 63, due to the consequences of the pandemic and the resulting global economic slowdown.
A total of 2,000 working adults in Singapore between the ages of 21 and 65 were surveyed online between September 2 and October 3 this year.
About a third of those surveyed (31 percent) were having trouble paying their home loans, and 9 percent indicate they may be forced to pay off or downgrade, according to the survey.
The survey did not ask if respondents had deferred repayments on their home loans, as part of moratoriums offered by banks as part of Covid-19 relief.
The passive income of Singaporeans was also negatively affected by the weakening economy, mainly due to the poor performance of dividends, which is the main source of passive income. The index score on this front fell from 42 last year to 28. After dividends, the other top sources of passive income are interest income and rental income.
Despite the pressure on financial health, Singaporeans are still saving more to deal with possible contingencies (index score of 92 this year compared to 87 previously), with around 28 percent of income saved each month.
Millennials stood out among age groups for having more financial worries: 49% of them are worried about money, compared to 37% of Generation X and 26% of baby boomers.
Those in the age group, however, are driven to start investing earlier compared to their predecessors due to a desire to increase wealth quickly, according to OCBC.
About 42 percent say they don’t know the best way to grow their money, but millennials are the most likely to do their own research before making financial decisions.
Only about a quarter of them seek professional advice when making investment decisions, while 39 percent of millennial investors say they speculate excessively for quick profits.
Another finding from the OCBC survey was the discrepancy in financial goals between Singaporean women and mothers.
For Singaporean women, increasing their own wealth was the top financial priority (51 percent), followed by a link between retirement planning and financial care for loved ones at 47 percent.
For mothers, the top priority was taking care of their loved ones financially at 56%, followed by planning for retirement at 46%, with their wealth growth coming last at 40%.
While the survey found that more women than men believe they don’t know how to grow their money, those who said they are confident and knowledgeable to make investments actually had a higher rate of return than men.
Overall, OCBC found that Singaporeans are not yet ready for retirement, and that 75 percent are not on track with their retirement planning.
Most respondents underestimate the amount of retirement required in their ideal retirement lifestyle by an average of 32 percent.
OCBC Singapore’s director of wealth management, Tan Siew Lee, said: “From the OCBC Financial Well-being Index 2019 and 2020, the message was clear: Singaporeans have a poor understanding of their overall financial situation and projected financial needs when jubilee. “
As such, the bank has enhanced its OCBC Life Goals financial planning portal to help Singaporeans plan for longer-term goals like retirement. She will also conduct a women’s masterclass led by Ms. Tan to build her investment confidence.
Koh Ching Ching, OCBC Group Communications and Brand Director, said: “We expected the index to improve from 2019 or stay the same, but the financial impact of Covid-19 on Singaporeans was certainly reflected in the decline in the index”.
But he noted that Singaporeans are becoming more cautious and saving regularly, while setting aside emergency funds.
“If these habits are maintained and lessons are learned from the crisis, as Singapore and the region recover from the pandemic, we expect to see an increase in the Index next year, perhaps even surpassing the 2019 result,” he said.
[ad_2]
