SINGAPORE - Hit by the rising cost of living, workers in Singapore have to save nine years longer for an adequate retirement compared to previous generations, according to an HSBC report released on Wednesday (July 13).
According to the report, the average Singaporean starts saving for retirement at 32 and continues for another 29 years. This is nine years more than their predecessors, who saved an average of 20 years, starting later at age 39.
Despite the longer and earlier period of saving, 41 per cent of current working age Singaporeans wish they had started to save earlier - and more than one-third or 38 per cent have stopped saving altogether due to various difficulties.
Said Mr Matthew Colebrook, head of Retail Banking and Wealth Management, HSBC Bank (Singapore), said: "The unfortunate causality of a rising cost of living is that people nowadays are having to save further and for longer than their predecessors. Unfortunately in many instances, life events are also getting in the way from setting aside money earlier or in a consistent manner."
The HSBC Future of Retirement: Generations and Journeys report is based on the views of more than 18,000 people in 17 countries, including a total of 1,008 Singaporeans (both working age and retired).
The survey also found that Singaporeans are predominantly using cash savings, supplemented by day-to-day salary and a property downsize to fund their retirement.
The report finds that 21 per cent of Singaporeans - compared to the global average of 6 per cent - expect to downsize or sell a property to help them to fund their retirement.
According to the report, 60 per cent of working age Singaporeans surveyed expect to draw on cash savings to fund their retirement. A further 40 per cent highlighted that they will continue to work, with 12 per cent saying they rely on government pension schemes.
Said Mr Colebrook: "The report reveals a degree of tunnel-vision amongst Singaporeans with cash savings and property being the key investments of choice - often at the exclusion of almost any other asset class.
"But all asset classes' performance will rise and fall as the current softening of the Singapore property market and low deposit rate environment show us. This speaks volumes for why it is important to seek diversification in a savings plan."
Lack of information on retirement may potentially be one of the reasons why working age Singaporeans have not started planning for their retirement, said HSBC.
According to its survey, 26 per cent of pre-retirees here say they have never received advice or information about retirement. Findings also show that 23 per cent of pre-retirees have not started saving (on par with global average of 24 per cent), including 10 per cent who are aged 60 or over.
Mr Colebrook added: "While Singaporeans are savvy savers in general, they may not have the relevant knowledge to help them start saving or consider investment options in order to sustain the lifestyle they had before retirement."