Can millennials have it all? 3 in 5 who are savers say #Bringon1001
They are confident of building a robust nest egg to take on the responsibilities and challenges of a longer lifespan and to have some fun too
Panellists at Prudential Singapore’s Saving for 100 media launch event. L-R: Ms Dawn Cher, financial blogger (aka Budget Babe); Mr Dennis Tan
, CEO, Prudential Singapore; Mr Abel Lim
, Executive Director, Head of Wealth Management Advisory, Personal Financial Services, UOB; and moderator Ms Tan Ping Ping
, Head, Corporate Affairs, Prudential Singapore.
Singapore, 23 September 2020 – Even with the expectation of a longer lifespan, millennials are confident that they will have enough savings to last a lifetime.
Three in five (61 per cent) millennials (aged 25-34) surveyed for Prudential Singapore’s (“Prudential”) study - Saving for 100? Funding longevity in a time of uncertainty - believe they will have a robust nest egg for themselves and their family. Those in the older age group (aged 35-54) are slightly less confident about financing their old age, with less than half believing they can do so.
To fund their retirement, millennials are diversifying their savings across multiple financial instruments such as fixed deposits, life insurance, health insurance, real estate and investment products. With a greater tolerance to risk than the older generations, this group of younger Singaporeans is also planning to put their money in higher-risk assets, such as equities and exchange-traded securities. Seven in 10 (72 per cent) surveyed say they are willing to invest more of their savings compared to 58 per cent of the middle-aged respondents (aged 55-65).
Prudential Singapore’s CEO Dennis Tan say he is heartened to see that millennials are taking proactive steps to protect and to grow their wealth to ensure they have enough savings for tomorrow.
“We know that while Singaporeans are ardent savers, many will struggle to retire at 62 with enough savings to last another 30 to 40 years. It is important to start financial planning earlier in life so you have a longer runway to build your retirement nest egg, and can be better prepared to weather economic uncertainties and disruptions, such as the COVID-19 pandemic. As the old adage goes, if you fail to prepare, you prepare to fail,” said Mr Tan.
Duty of care and healthcare greatest challenge for millennials
While millennials are confident of their financial future, they will be challenged by responsibilities to financially support their ageing parents, children and grandchildren.
Nearly nine in 10 (89 per cent) polled say they expect to take care of their elderly parents’ needs, while seven in 10 (71 per cent) are committed to do the same for their children and grandchildren.
On the other hand, only 30 per cent expect their children to provide for them when they retire. This is not surprisingly given the on-going decline in family size. Half (53 per cent) of today’s millennials do not think it is practical to have more than one child which means there will be fewer siblings to share financial responsibilities in the family.
Rising healthcare spend is another challenge. Nearly 80 per cent of respondents including millennials listed healthcare as their top saving priority. This stems from concerns about ill health in old age as medical inflation2 and the burden of chronic disease continue to increase3.
Fulfilling personal aspirations
Besides caring for their family, millennials also need to consider how they can fulfil their personal goals. More than half (52 per cent) want to take time off from work and the main purposes of the career breaks include travel, study and skills training, and care for family.
In addition, more than four in five (87 per cent) plan to invest in their health and skillsets so that they remain financially self-sufficient for their extended years.
Can millennials have it all? Investing in wealth, health and skills is key
Mr Tan opined, “We are seeing a new generation of younger Singaporeans who are seeking to break away from the traditional three-stage life of study, work and retirement. They desire to live a multi-stage life where they could have three or more occupations with career breaks in between to meet their personal aspirations.
“This begs the question: can millennials have it all? Can they take care of their family, fulfil their passion, have some fun, and at the same time, save enough to be financially independent at old age? Good financial planning is of course key. But investing in health and skills is just as important to ensure one can be financially self-sufficient for longer.”
Mr Charles Ross, Editorial Director, Asia of Thought Leadership at The Economist Intelligence Unit (The EIU), reinforced that with life expectancy rising, the question of financing longevity lurks at the back of every Singaporean’s mind.
“Uncertainty brought on by the Covid-19 crisis has been a stark reminder of the need for individuals to be financially resilient to support both their changing lifestyles and longer lifespans. The EIU research found that a significant number of Singaporeans (34 per cent) expect to live 85 years or longer, and many are using diverse financial methods and instruments—including higher risk financial strategies—to fund a longer life. The crisis has highlighted the need for everyone to adapt to change and be financially resilient, and this study has shown that many citizens are up to the challenge,” said Mr Ross.
These findings reflect the saving and investing attitudes of 1,200 Singapore residents aged 25-65 surveyed in a study commissioned by Prudential and researched by The Economist Intelligence Unit (EIU).
Saving for 100? Funding longevity in a time of uncertainty is the fourth instalment in the Ready for 100 series of reports commissioned by Prudential Singapore and researched by The Economist Intelligence Unit (The EIU). For more information on Prudential’s Saving for 100 programme, please visit: https://www.prudential.com.sg/others/Saving-for-100
To find out more about the Ready for 100 series (https://readyfor100.economist.com), please click on the following links:
About Prudential Assurance Company Singapore (Pte) Ltd (Prudential Singapore)
Prudential Assurance Company Singapore (Pte) Ltd is one of the top life insurance companies in Singapore, serving the financial and protection needs of the country’s citizens for 89 years. The company has an AA- Financial Strength Rating from leading credit rating agency Standard & Poor’s, with S$42.02 billion funds under management as at 31 December 2019. It delivers a suite of well-rounded product offerings in Protection, Savings and Investment through multiple distribution channels including a network of more than 5,000 financial consultants.
1#Bringon100 is a social campaign based on the findings from the research paper “Saving for 100: Funding for longevity in a time of uncertainty”. It aims to motivate Singaporeans to view longevity as an opportunity and embrace it with courage and positivity.