Singaporeans optimistic about economy

New research show Singaporeans more optimistic about the economy, but insecure about their financial future

- Most Singaporeans believe they do not have enough money to provide for retirement, and to cope with the unexpected
- In contrast, there is an optimism about their short term financial future
- Increase in trust in financial institutions have led to consumers investing more
- Younger Singaporeans are less confident about making financial decisions. In the 25-34 age group, 37% wish someone else would sort out all their financial affairs, compared to 29% for those in the 35-44 age group.
- Investments are the preferred form of financial products for Singaporeans in the next 12 months (39%) followed closely by Savings (27%).

The results of the latest Consumer Attitudes to Savings (CAS) study released today by Aviva, the world's sixth largest insurance group, show that Singaporeans are insecure about their long-term financial future, particularly about retirement.

Half of those surveyed worry that they will not have enough money to provide an adequate standard of living when they retire, while 44% think they are going to have to work beyond the normal retirement date to fund their retirement. Similarly, only 32% feel they have enough savings or investments to cope with the unexpected.

This uncertainty and lack of confidence in their long term financial future could be a factor behind an increased focus in financial planning. 40% disagreed that there is little planning in their approach to finance, an increase of 8% from the same time last year. The study also showed 67% of Singaporeans were planning to put more or the same amount of money in investments in the next 12 months, an increase of 5% from the same time last year.

Mr Simon Newman, Chief Executive Officer of Aviva Singapore, said, "Singaporeans have always worried about their financial future. But it is heartening to note that their worries are turning into action and there is increased interest in planning for the future."

Optimism in Singapore economy and increasing trust in financial institutions

In contrast with their concerns about the long term, Singaporeans are optimistic about the short term. Most of them indicated that they feel the Singapore economy will stay the same or get better over the next 12 months (86%), and they also expect the finances of their household to stay the same or improve in the same time period (89%).

In parallel, trust in insurance companies increased by 6%, while trust in local or regional banks increased by 10%, compared to the same time last year.

This confidence has also led to an increase in appetite for investments. 48% of respondents disagreed that investments are pointless because their future value cannot be predicted, an increase of 9% compared to the same time last year. Their views on investments, however, remain cautious, with 66% of Singaporeans indicating the most important consideration when selecting investments is a guaranteed or safer rate of return, rather than achieving the highest yield.

Mr Newman said, "In the short term, consumers are more optimistic about how the economy is going, and this extends to an increase in the trust levels towards financial institutions. This is corroborated by figures from Aviva Singapore where we doubled sales in Life products last year."

"The industry has to maintain this trust by continuing to strive for transparency with consumers, and pursue business growth with the needs of Singaporeans in mind."

The first in a three wave series of surveys for 2011, this comprehensive study examines consumers' outlook on savings and investment study across 11,320 respondents from 10 markets worldwide. The 2011 survey was conducted from February to March this year, with a representative sample of 1000 respondents from Singapore.

About the Consumer Attitudes to Savings Survey

- The Aviva Consumer Attitudes to Savings (CAS) survey was commissioned to examine consumers' outlook on savings and investment.
- It started in 2004, and consist of three waves done throughout each year. The results of this survey represents the first wave of the 2011 study.
- The study covers ten of its core markets in Europe (UK, France, Italy, Spain, Poland and Ireland), the US and Asia (China, India, Singapore).
- It is a nationally representative survey of adults aged 18+. 1000 respondents were interviewed in each market, with the exception of China, where 2000 adults were surveyed (total sample size 11,000).
- The CAS was conducted using an online survey method and face-to-face interviews.