Govt urged to promote savings as society ages

03-Mar-2021 Intellasia | BangkokPost | 5:02 AM Print This Post

The government is being advised to improve savings-related regulations in order to build up financial security, particularly for the elderly.

Danucha Pichayanan, secretary-general of The National Economic and Social Development Council (NESDC), said the state planning unit is about to propose the government improve regulations in relation to savings to encourage Thai people to increase their savings which would create greater financial security and reduce the government’s financial burden over the long term.

“The issue will be raised soon for consultation at the NESDC’s board meeting and will later be proposed to the government,” said Danucha.

According to Danucha, the proposals include a plan to allow members of the social security fund to save up to 10 percent of their salary per month. The savings plan should be run on a voluntary basis and without additional contributions from employers or the government.

Danucha also suggested the government support and promote the employment of retired people to help them generate more income and develop financial literacy among the elderly.

Danucha said Thailand is already an ageing society with 10 percent of the population aged over 60 since 2005 and is now approaching a completed aged society with persons aged over 60 years set to account for 20 percent of the population in 2023.

The country is scheduled to become a super-aged society in 2033, a situation in which the elderly account for 28 percent of the total population.

According to the NESDC’s report, although Thailand is already an ageing society, savings among the elderly remain insufficient to create their well-being and good health.

Various studies have also revealed that Thailand is relatively low in the rankings for savings worldwide, according to Danucha, citing a study conducted by the Thailand Development Research Institute (TDRI) in 2019 showing middle-income people in urban areas need to have savings of about 4.3 million baht per household to ensure they have sufficient money to spend after reaching the age of 60 while the elderly in remote areas are estimated to need 2.8 million baht.

A socio-economic survey conducted among Thai households in 2019 by TDRI also showed only 120,000 families had an income of more than 2.8 million baht or 0.5 percent of total households.

The survey shows savings among Thai households are still far from sufficient for the future living requirements of the elderly population.

The NESDC reported that among 37.9 million members of the Thai workforce in 2020, 17.5 million had social security plans including a pension fund, provident fund and social security fund as required by Section 33 and Section 39 of the social security fund.

The remaining 20.4 million were labour who were participating in voluntary savings plans including the National Savings Fund (NSF), a voluntary pension fund for self-employed workers.

 

Category: Thailand

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