Singaporeans Lack Financial Confidence and Are Among the Most Risk Averse in the World, Reveals Aviva Survey
- Findings highlight need to better inform and help the population in saving and investing for their retirement
3 December 2008, Singapore - Singaporeans lack financial confidence and are among the most risk averse in the world, according to a survey by Aviva. In its fifth year, Aviva's Consumer Attitudes to Saving report also identified gaps in Singaporeans' retirement planning, reinforcing the need to better inform and help the population in saving and investing for their retirement.
"Singaporeans feel poorly informed to make sound financial decisions, which might have led to a prevalent risk adverse mindset. While many have started taking steps to prepare for their retirement, the majority are still worried they will not have enough retirement funds. All these clearly highlight the need for financial services firms to inform Singaporeans to raise levels of retirement planning to reduce anxiety about the lack of financial knowledge and insufficient levels of saving," said Mr. Shaun Meadows, CEO of Aviva in Singapore, Hong Kong and the Middle East.
The survey found that less than half of Singaporeans (49%) felt they had the information needed to make well informed decisions on their personal finance. Coupled with this lack of financial confidence, Singaporeans are also the second most risk averse in the world, being more likely to prefer products that offered a safe or guaranteed rate of return. The latter was rated most important when thinking about return from savings/investment by 42 per cent of respondents.
Other key survey findings include:
- Gaps in retirement planning - More than two-thirds of respondents (68%) are taking steps now to ensure that they have an adequate level of income for retirement. However, 61 per cent are still worried that they will not have enough money to provide an adequate standard of living after retirement.
- Singaporeans unprepared to cope with the unexpected - While close to six in 10 respondents (59%) think that life in general is more risky than it used to be, only one-third (33%) said they had enough savings/investments to cope with the unexpected.
- Short term approach to savings - Singaporeans have among the shortest time horizons, behind just Hong Kong and China, with 66 per cent of respondents said their most important financial time scale was within the next five years.
- Lack of affordability the largest barrier to saving/investing - Lack of affordability was cited by respondents as the largest barrier to them saving/investing more money (41%). This is followed by risk of losing savings/investments (19%), low interest rates/potential growth (16%), and lack of good advice (14%).
- Singaporeans open to working past retirement age - Singaporeans are second to Hong Kongers for wanting to work after retirement age. More than six out of 10 Singapore respondents (62%) would like to work, either full time or part time, after the usual retirement age.
- 'Word of mouth' an important factor in helping guide decisions - Close to half of respondents (45%) say that recommendations by friends, family and colleagues who save/invest with the company is most important when choosing a company that they may use for savings or investment. Nearly seven out of 10 respondents (69%) would recommend a financial services company/product they like.
Aviva's global Consumer Attitudes to Saving study is one of the biggest financial services insight projects in the world. In total, more than 100,000 people have now taken part in the annual survey since its inception in 2004, and the most recent tranche covered 28,500 people in 25 different countries across Europe, Asia Pacific and North America. The report found that there has been a broad increase in risk aversion and cautiousness among people all over the world, including Asia Pacific – and this increase pre-dates the recent financial crisis. The full report is available from www.aviva.com.
Aviva is the leading provider of life and pension products in Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2007. Aviva in Singapore is the leading provider of employee benefits and healthcare. Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of S$147.9 billion at 31 December 2007 and funds under management of S$964.2 billion at 30 June 2008.