1-in-3 Singapore investors in debt, excluding mortgages - and they mainly blame daily living expenses

An office worker at Raffles Place, the heart of the central business district (CBD).
An office worker at Raffles Place, the heart of the central business district (CBD). ST PHOTO: LIM YAOHUI

SINGAPORE - Singapore has the third highest proportion of investors in debt among eight Asian markets surveyed, with one in three carrying debt excluding mortgages, according to a Manulife survey released on Tuesday (Feb 2).

Close to 46 per cent of indebted Singapore investors owe S$10,000 or more in the form of personal loans, credit card debts or student loans.

Daily living expenses such as food, utilities and transportation were the top contributor to their debt, they said, followed by discretionary expenses such as clothes, entertainment and travel.

Forty-four per cent expect to take longer than one-and-a-half years to clear their debt, the Manulife Investor Sentiment Index found.

More male investors were in debt than female investors, and carried nearly double the average debt of S$40,985, compared with female investors who carried the average debt of S$25,502.

The Manulife half-year survey is based on 500 online interviews in each market of Singapore, Hong Kong, China, Taiwan, Japan, Malaysia, Indonesia and the Philippines. Those interviewed were middle class to affluent investors, aged 25 years and above, who currently have investment products.

Nearly 70 per cent of Singaporean investors in debt regret not planning their investments better. About 27 per cent regretted not being more proactive in reviewing their portfolio and 26 per cent felt they were holding too much money in cash instead of making more investments.

But the survey also found that close to half (44 per cent) of Singapore investors who are parents do not teach their children about financial planning, with close to one in four attributing their inaction to their own lack of knowledge.

The lacklustre global economy also hit Singapore investor sentiment, which dropped eight points in the fourth quarter last year to 21 points.

The drop was driven by a sharp drop in investor sentiment towards China, which plunged 19 points to an all-time low of five points since the second quarter of 2014.

Most investors appear to be taking a wait-and-see approach towards China, with nearly 50 per cent saying they would avoid investing further in China until its economy improves, and 43 per cent uncertain over what is the best investment strategy.