Millennials biggest savers during Covid-19 pandemic, on track to 'comfortable retirement': Survey

• Digital wealth manager Syfe conducted a poll of 1,000 Singaporeans aged 25 to 60
• It found that about 60 per cent of millennials saved more than 20 per cent of their wages
• This is the highest among all the wage groups polled 

SINGAPORE — Millennials in Singapore are the biggest savers during the economic uncertainty brought about by the Covid-19 pandemic, a survey has found.

They are on the way to a comfortable retirement if they maintain their current savings rate and relatively low debt levels, the findings showed.

About three out of five millennials polled at the end of last year saved more than 20 per cent of their wages — the highest percentage among all the age groups surveyed. 

The findings were released on Tuesday (March 9) by digital wealth manager Syfe.

It calculated the retirement preparedness of 1,000 Singaporeans aged 25 to 60, based on their expected retirement lifestyle and needs, current income, accumulated savings, savings rates and investments, as well as home ownership. 

They were then each given a score, which placed them in one of the four levels of retirement readiness: High, adequate, low or very low.

Despite financial experts recommending that individuals save at least 20 per cent of their wages each month, less than half of the respondents (46 per cent) aged 35 to 44 said that they were achieving that — compared to 66 per cent for the millennial group.

For those aged 55 to 60, just 51 per cent said that they did so.

People aged between 35 and 54 were found to be the least ready for retirement, possibly due to their lower savings rate and higher debt levels than other age groups.

These respondents in the “sandwiched generation”, who usually have to care for young children and older parents, may have greater financial responsibilities, the firm said. 

“This indicates that youth is a natural advantage when it comes to building wealth for retirement. With fewer larger financial responsibilities like mortgages, millennials may find it easier to save more.”

In all, a majority of Singaporeans planning for retirement saved more last year than they did in 2019, although their views on their readiness to retire had worsened during the pandemic. 

Two out of three respondents did not think they could retire comfortably even though 76 per cent said that they were saving for retirement.

“This disparity could be explained by the fact that 50 per cent of Singaporeans are saving less than 20 per cent of their salary,” Syfe said. 

In what could be a response to concerns on the pandemic putting further strain on personal finances, 73 per cent of the respondents said that they either increased or maintained their level of savings as a result of Covid-19. 

However, 60 per cent of Singaporeans feel more dissatisfied with how much they are saving compared with 57 per cent in 2019.

Mr Dhruv Arora, founder and chief executive officer of Syfe, said that with the impact of the pandemic naturally increasing concerns around financial security, it is encouraging to see a marginal improvement in the overall index scores.

“But with the economic environment as challenging as ever, it is even more critical that Singaporeans review their approach to savings and investment to ensure that they can prepare adequately for the future,” he added.