CPF members' balances and interest earned hit new highs last year

Central Provident Fund (CPF) members' balances have hit a new high, growing by 9.4 per cent to $505.7 billion as at the end of last year - from $462.1 billion in 2020.

A record $18.3 billion in interest was paid to members last year, added the CPF Board's annual report released yesterday. In 2020, $16.8 billion in interest was paid.

Voluntary top-ups of Special and Retirement accounts also climbed to a new high of $4.8 billion last year, up from $3 billion in 2020. The top-ups were made by 294,000 CPF members, with about half doing so for the first time.

The amount withdrawn for housing has gone up, with 996,000 members using $21.9 billion of their CPF savings last year - a jump from $17.3 billion in 2020.

The improvements in the balances - and consequently the interest received - reflect Singapore's economic performance last year, with higher wages increasing CPF contributions, said observers.

The increase in interest paid is driven by the larger balances held by CPF members, while the rise in housing withdrawals is indicative of a healthy property market that has seen price growth, said Professor Lawrence Loh from the National University of Singapore Business School. "Going forward, it is expected that the increase in CPF balances will be sustained due to the recovery of the economy, including the various pandemic-hit sectors," he added.

Last year, the number of CPF members increased by 2 per cent to 4.1 million.

About 416,000 members received monthly CPF retirement payouts totalling $2.2 billion last year. Of these, more than 85,000 members are on the CPF Life scheme, which provides a lifelong monthly payout that begins when the member turns 65 years old.

CPF Board chairman Yong Ying-I said in the report that efforts had been strengthened to help members in their retirement, with schemes to boost the retirement income of those with lower balances and lesser means. For instance, the Matched Retirement Savings Scheme launched last year helps seniors who have not reached their Basic Retirement Sum to build their retirement savings through a dollar-for-dollar matching grant.

Under this scheme, the Government matches cash top-ups made to the Retirement Account of eligible Singaporeans aged 55 to 70, up to an annual cap of $600. Over 117,000 members benefited from $68 million in matching grants for cash top-ups made last year.

According to the report, the CPF Board also assisted 8,496 members who were in financial distress amid the Covid-19 pandemic by connecting them with agencies that can provide help beyond what it can offer, under the Rejected Appeals Management Protocol initiative.

The number of transactions performed on the CPF website and mobile app, meanwhile, nearly doubled to 171 million last year, from 90 million in 2020.