A recent survey by OCBC revealed that 70 percent of Singaporeans and permanent residents do not have enough money in their savings for them to maintain their current lifestyle for more than six months if they were to lose their jobs now.
The survey was carried out last month during the circuit breaker period to find out the financial impact of the COVID-19 pandemic on the people of Singapore. It surveyed 1,000 Singaporean and PR working adults between the age of 25 and 65, drawing a monthly salary from S$2,000.
Amongst those surveyed, it was found that nearly half (47 percent) have been subjected to a reduction in income, such as pay cuts, being forced to take no-pay leave, or had their commission earnings reduced.
On the other hand, about 46 percent of them have expressed their concerns of losing their jobs even with financial support from the Government, whereas 18 percent of them have enough savings for them to pay for just one month of expenses.
However, more than half the respondents stated that they have used money in their savings during the pandemic. Additionally, 20 percent said that their savings dropped by more than 20 percent, while another 20 percent of them pointed out that they were maintaining their savings level.
The good news is that 5 percent of respondents highlighted that they successfully increased their savings by more than 20 percent. The remaining 20 percent added that their savings have also increased by up to 20 percent.
Unfortunately, 25 percent of respondents have voiced out their intention to take or have taken a second job in order to go through this tough times. Another 41 percent have raised concerns if they have enough insurance coverage, with 47 percent of Singaporeans aged between 40 and 54 are the most worried.
Seniors are saving less, youngsters are saving more
According to the survey, it was also found that most respondents have stated that their retirement plans were affected given that the pandemic have hit people across different age groups.
A third of those in the age category of between 40 and 54 have revealed that they have cut their retirement savings. Contrarily, 23 percent of individuals in their 20s have in fact registered for a financial plan, indicating that they are saving more for retirement.
If that’s not all, the pandemic had also made an impact on the investment strategies as two in five mentioned that they are thinking of downsizing their portfolios. Close to 16 percent noted that they will reduce their investment by more than 20 percent.
However, the respondents did voice hope for the next six months. More than half (55 percent) said that they are indeed worried of their job and income situation right now, but 38 percent expressed that they will continue to worry about income stability and 35 percent about job security by December.
“It is encouraging that some are doing the right thing to boost their financial health, by continuing to save, spending prudently and making sound investments, according to their risk appetite and financial circumstance,” said Tan Siew Lee, OCBC’s wealth management head.
She added, “But we also hope that those who are cutting back on these aspects, which are crucial to building a nest egg for retirement, will not despair.”
Ms Tan also asserted that crisis like the current COVID-19 will pass, just like other events such as SARS (Severe Acute Respiratory Syndrome) and the Asian Financial Crisis.