OCBC survey finds Singaporeans and PRs facing financial stress over Covid-19

Singapore

FINANCIAL stress since the "circuit breaker" was imposed appears to have caused many Singaporeans to shelve or reduce their retirement savings, a survey by OCBC has found.

The survey in May found that nearly half (47 per cent) of working adults here have suffered a drop in income due to wage cuts, no-pay leave or reduced commission earnings following the near lockdown put in place early in April.

A similar proportion (46 per cent) are worried about losing their jobs despite extensive government support.

The Covid-19 crisis has also forced many to stop or reduce their savings for retirement.

OCBC surveyed 1,000 Singaporeans and permanent residents between 21 and 65 years old in May, about 1.5 months into the circuit breaker. The respondents' ages and income levels were representative of the population.

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The OCBC Financial Impact Survey for Covid-19 sets out to highlight gaps in Singaporeans' financial knowledge and provide tips from its wealth experts on how to move ahead.

The survey found that among those who have invested, more than half (54 per cent) were worried about their portfolio, with 40 per cent saying they intend to reduce their investments. About 16 per cent said they would reduce their investment by more than 20 per cent.

Of those with financial plans, 27 per cent said they have stopped setting aside or have reduced their funds for retirement. A third (32 per cent) of the sandwiched generation - between age 40 and 54 who have to care for young children and ageing parents - said they have cut down on retirement funds.

In contrast, 23 per cent of those in their 20s with a retirement plan are saving more for retirement even amid the uncertainty.

More than half (55 per cent) of respondents said they have reduced their savings; 22 per cent said the reduction is more than 20 per cent.

Only 30 per cent can sustain themselves for over six months if they were to lose their jobs now. Less than a fifth (18 per cent) have enough savings to cover only one month of expenses.

Forty-one per cent are worried that they may not have enough insurance cover, with 47 per cent of those in the 40 to 54 age group the most concerned.

Many, however, are taking steps to future-proof themselves. One in two (53 per cent) respondents are attending more online courses than before the circuit breaker. Three in five (61 per cent) said they were working harder than before the virus hit, with more than half doing it in order to keep their jobs. About a third (35 per cent) intend to or have taken on a second job.

Of those in their 20s, 64 per cent said they were taking up more online courses, compared to an average of 53 per cent across all age groups.

OCBC Bank head of wealth management Tan Siew Lee said: "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 circumstances.

"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."

Crises will pass, she said. "If you are currently experiencing discomfort from the situation, take the opportunity to learn and do not give up."

Eugene Lam, 28, client adviser with an international bank, has actually raised the proportion of his monthly pay for savings and investment, from roughly 60 to 70 per cent since the circuit breaker. He said the closure of retail shops has reduced his daily expenses. He is single, lives with his parents and invested in a private property last year.

"My job is never secure, and in banking, no one is indispensable. With the government providing aid and relief to businesses, and my management providing re-assurance, it does give me some form of comfort in terms of my job security during this difficult time. However, I am always prepared for the worst, and I have to be careful not to overstretch my financial commitment."

OCBC has launched a series of videos featuring its employees who share their experiences from previous crises, and its wealth and human resource experts who provide tips on how to make the most of the current crisis.