Things are looking up on the money side for Singaporeans: OCBC survey

SINGAPORE- After a year of pandemic-induced money struggles, Singaporeans are beginning to see a ray of hope about their financial affairs, says the third instalment of an annual survey by OCBC Bank.

Though not quite back at pre-pandemic 2019 levels, Singaporeans are saving more, owing less, and showing more optimism about the future.

They are also investing more while moderating their expectations of retirement life.

They are not alone in this, as worldwide, the coming together of generous government payouts, bullish stock markets, and lockdowns has racked up higher savings rates and frenzied investment trading – even as pandemic populations experienced a lower sense of security.

OCBC’s Financial Wellness Index 2021, conducted online over a month from mid-August this year, polled 2,051 working adults in 24 indicators under 10 categories, including saving and spending habits, managing of debts, investments and retirement planning.

“The Covid-19 pandemic and its drag on the economy has made many of us more aware of our financial situations,” said the bank’s head of wealth management in Singapore, Ms Tan Siew Lee.

Being “stuck in Singapore” for more than 18 months could have heightened financial stocktaking, she added.

In contrast, one year ago, more Singaporeans were finding themselves in debt. The report recapped: Three in four were not on track to reaching their ideal retirement savings; more were “speculating excessively”, “borrowing money from friends and family” and “spending beyond their means”.

This year, more young adults and women are investing as well. Workers in their 20s, armed with their own savings or capital from parents, are investing a lot more – up 22 per cent from last year and in a wider range of investments, such as cryptocurrencies and foreign stocks, according to the survey.

In a change from previous generations, young investors are also bypassing professional advice, choosing to rely more on their own research and judgement.

The introduction of commission-free trading apps, their engagement with online content such as YouTube and communities like Reddit, as well as influence from family members and friends are spurring them to pursue “more volatile” investments like cryptocurrencies and meme stocks, which have gained popularity through social media.

“There is also this Fomo – fear of missing out – like my friends are all doing it. Why am I not?” said Ms Tan.

Mr Ang Yu Ze, 21, who worked in a family office managing a “friend’s father’s portfolio”, said: “The pandemic really presents us young and retail investors with huge opportunities to not only learn, but also grow our wealth from a young age.”

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Now pursuing a computer science degree so he can “truly grasp the underpinnings of my investments”, Mr Ang added: “I feel that most people have the misconception that young retail investors are reckless, given the recent hype in meme stocks and cryptocurrencies.

“Instead, I believe that us, Generation Z, are primed to understand the intricacies of technological advancements in the cryptospace or new innovations that older investors may not be able to appreciate as much.”

The motivation to make their money grow starts even before these youth enter the workforce.

“My sole goal is to grow my personal wealth aggressively,” said full-time national serviceman Edmond Chew, 20. “I am a far more aggressive investor than my Dad.”

Compared with his parents, who are both in their 40s, Mr Chew has a view on hard work that is not that different from theirs. “The only difference is that I make my money work harder… while they take a less risky approach,” he said.

Despite all the haste to make more money, said the survey, young adults’ aspirations are rather universal: Retire more comfortably, get richer, and spend on people they love more generously.

“To be able to live on passive income which allows more freedom to make career choices,” said Mr Chew, when asked what he would do when he has all that money.

“Of course, it will be nice for me to contribute to my parents’ retirement not too long in the future.”

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