Finances of more Singaporeans hit by COVID-19: OCBC survey

24-Nov-2020 Intellasia | Yahoo Finance Singapore | 12:38 PM Print This Post

The coronavirus pandemic has put a strain on the financial health of more Singaporeans, affecting their ability to pay housing loans and derive passive income, according to a study by OCBC Bank released on Monday (23 November).

About 31 per cent of respondents have struggled with paying their housing loans on time, of whom 9 per cent said they may have to sell off or downgrade their properties, the survey found.

Passive income has also taken a hit mainly due to the poor performance of stock dividends, which are the main source of passive income for most respondents. The other sources of passive income include interest income and rental income.

As an indication of the respondents’ overall financial health, the OCBC Financial Wellness Index fell to 61 out of 100 this year from 63 in 2019.

“We had hoped that the Index would improve from 2019 or remain the same, but the financial impact of COVID-19 on Singaporeans was undoubtedly reflected in the drop in the Index.” Koh Ching Ching, OCBC’s head of group brand and communications said.

With the fear of further strain on personal finances and the uncertain future from the effects of COVID-19, Singaporeans are saving more, the survey found. They are saving 28 per cent of their monthly income this year, compared with 26 per cent in 2019.

Millennials were the group who are most worried about money at 49 per cent of them, compared with 37 per cent for Gen X and 26 per cent for baby boomers.

The top priority for millennials is to grow their wealth, yet 42 per cent of them don’t know the best way to do so. Many turn to online sources, friends and relatives for information about investments. About four in 10 millennials who invest admitted that they had speculated excessively in the hope of making a quick buck.

The study also showed that women are less likely to invest than men, with 40 per cent having no investments compared with 25 per cent of men. The lower level could be attributed to 38 per cent of women thinking that investing is gambling, compared with 30 per cent of men, according to OCBC.

But when women have done proper research and sought expert advice before investing, the returns that they had earned were slightly higher than those from their male counterparts, the study showed.

With more pressing immediate financial worries at hand, Singaporeans have put their retirement goal on the backburner. As many as three in four Singaporeans are falling behind in their retirement plans.

About 78 per cent of Singaporeans underestimate the amount needed for retirement, the survey found. On average, they underestimated the amount by 32 per cent.

The survey found the respondents did not know that for retirement, they need about S$2,300 a month to sustain a basic lifestyle and about S$5,200 a month for a higher-end lifestyle.

“From the OCBC Financial Wellness Index 2019 and 2020, the message was clear Singaporeans don’t have a good understanding of their overall financial situation and of their projected financial needs when they retire,” OCBC Bank’s head of wealth management Singapore, Tan Siew Lee, said.

As such, the bank has enhanced its OCBC Life Goals financial planning portal to help Singaporeans plan for retirement and other goals, Tan said. The bank also aims to start a class for women to boost their confidence in investing.

Launched in 2019, the OCBC Financial Wellness Index is based on the responses of 2,000 working adults in Singapore between 21 and 65 who were surveyed online between 2 September and 3 October this year.

https://sg.news.yahoo.com/singaporeans-finances-hit-by-covid-19-ocbc-survey-100641622.html

 

Category: Singapore

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