FOR IMMEDIATE RELEASE
Citibank Singapore Limited
1 February 2011
CITI FINANCIAL QUOTIENT SURVEY 2010:
SINGAPORE RESIDENTS BELIEVE THEY WILL HAVE TO WORK FOR AS
LONG AS THEY CAN TO SUPPLEMENT THEIR RETIREMENT INCOME
Survey findings reveal that respondents think that their CPF savings are
insufficient to support them through retirement; they are turning to alternative
means to take them through their silver years.
A recent nationwide survey by Citi on financial well-being and attitudes revealed
that a large majority of Singapore residents believe that their CPF (Central
Provident Fund) savings will not be sufficient to support them in their silver years.
To supplement their retirement income, Singapore residents say they will have to
continue working for as long as they can and turn to alternative means such as
proceeds from investment and insurance products.
Contrary to popular belief, the Citi Financial Quotient (Fin-Q) Survey 2010 also
showed a significant majority of respondents already have alternative plans in
place to supplement their CPF savings. Notably, the lingering impact of the
global financial crisis, which led to the erosion of wealth, has made the rebuilding
of retirement savings a top priority among Singapore residents.
According to the survey, seven in 10 respondents believe their CPF savings will
provide only some or little of their retirement income. Of this group, seven in 10
say they already have an alternative plan to supplement their retirement income,
although only one in four (27 per cent) of total respondents have a formal
retirement plan that had been developed in consultation with a financial
professional.
To supplement their retirement income, 52 per cent would continue to work for as
long as possible. 52 percent also say they would rely on the proceeds of
insurance policies and 51 per cent would turn to the proceeds of investment
products.∗
∗
Percentages, in this instance, do not add up to 100% as respondents were allowed more than
one option.
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Of those who said they would rely on the proceeds of insurance or investment
products, a significant 86 per cent currently hold or intend to purchase whole life
insurance. The next most popular products are endowment plans, with half of
respondents owning such plans and another 21 per cent intending to purchase
them.
Post-financial crisis, the top two financial concerns of Singapore residents are rebuilding their savings and saving more for retirement. More than two in five
residents (41 per cent) say that the total amount of their retirement savings is still
behind where it was two years ago before the crisis, while another 45 per cent
say this amount remains the same as it was pre-crisis.
While Singapore residents recognise the need to build their retirement savings,
the findings showed that only one in five Singapore residents (22%) feel they
know how much they need and are on track in this area, while another 55 per
cent were not sure how much they need but had started saving.
In addition, only a minority of Singapore residents think beyond their lifetime. The
survey showed that only 27 per cent of respondents are looking beyond
retirement and have discussed wealth transfer plans with their family members or
a financial advisor. In addition, only one fifth (19%) of Singapore residents
currently have an up-to-date will.
Commenting on the findings, Mr. Shrikant Bhat, Head of Wealth Management,
Citibank Singapore Limited, said: “As the life expectancy of Singapore residents
increases, along with growing expectations to maintain their lifestyles, the
amount of savings they need for retirement increases too. There is new
awareness that they may have to postpone their retirement. In this context, the
recently announced Retirement and Re-employment Act# is a timely one.”
“The global financial crisis too has left a lingering influence with Singapore
residents realising that they will have to rely on alternative ways to supplement
their retirement income. We are seeing similar trends with our own clients, who
are turning to investment and insurance products to support them through their
silver years.”
The Fin-Q survey, commissioned for the fourth consecutive year by Citi, was
conducted by independent global research firm CXC Research across 11
markets in Asia Pacific, comprising Australia, China, Hong Kong, India,
Indonesia, Korea, Malaysia, Philippines, Taiwan, Thailand and Singapore. In
Singapore, the online survey was conducted from 23 to 29 November with 500
randomly selected respondents across gender, age and income groups.
#
On 11 Jan 2011, Parliament passed the Retirement Age (Amendment) Bill 2011 to amend the
Retirement Age Act to introduce re-employment provisions and rename it the Retirement and Reemployment Act (RRA). RRA will come into effect on 1 Jan 2012 and will allow older employees
to continue working beyond the statutory retirement age.
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The Managing Director of CXC Research, Mr. Justin Lewis added: “The Citi FinQ research programme is designed to measure the financial wellbeing/
preparedness of consumers to respond to short, medium and long-term financial
issues.”
“The recent survey results in Singapore show that while the global financial crisis
has affected the savings and retirement plans of residents, more than half of
them have put the crisis behind them and are refocusing on planning for
retirement. At the same time, while there is definitely room for improvement, the
trend data over the past four years show Singapore residents continue to take
small steps in the right direction towards achieving financial wellbeing.”
About the Citi Fin-Q Survey 2010
The Citi Fin-Q Survey was designed to measure the Financial Quotient (Fin-Q
Score) or financial well-being of consumers. As part of this survey, Citi scored
respondents on 11 different questions closely related to financial well-being with
a maximum possible score of 100.
This year’s overall Citi Fin-Q score for Singapore residents was 55.1 out of a
possible total score of 100. This score remains unchanged from 2009, and
suggests there is further room for improvement. (Refer to Annex for details on
individual financial subject area Fin-Q scores).
As in previous years, the demographic data revealed that Fin-Q scores tended to
rise in tandem with age, income and the level of retirement savings currently set
aside. Males also typically outscored females. The survey also probed the
attitudes and concerns of Singapore residents over their personal financial
situation, the impact of the global financial crisis on their finances, as well as their
views towards investing, saving for retirement and digital banking.
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Citi
Citi, the leading global financial services company, has approximately 200 million
customer accounts and does business in more than 160 countries. Through
Citicorp and Citi Holdings, Citi provides consumers, corporations, governments
and institutions with a broad range of financial products and services, including
consumer banking and credit, corporate and investment banking, securities
brokerage, transaction services, and wealth management. Additional information
may be found at www.citigroup.com or www.citi.com.
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ANNEX
Summary of the Citi Fin-Q Survey 2010 (Singapore)
Overall Fin-Q financial health scores:
•
The Citi Fin-Q Survey 2010 posed questions to respondents in 11 different
key financial subject areas including their approach towards budgeting,
savings, credit card payment as well as the status of their insurance and
retirement savings.
•
Respondents were scored on each question depending on their answers –
the higher the score for the question in each subject area, the better their
financial position in that area.
•
Singapore residents had an average Fin-Q Score of 55.1 points (unchanged
from 2009) out of a possible 100, suggesting there is still room for
improvement. 57 per cent of Singapore residents had a Fin-Q score greater
than 50.
•
The demographic data revealed that the average Fin-Q score tended to
increase according to the individual’s age, income and retirement savings.
•
Males typically outscored females.
Fin-Q score highlights for individual financial subject areas:
•
Roughly eight in 10 Singapore residents (79 per cent, up 5 per cent from
2009) said they are “very satisfied” or “satisfied” with their overall quality of life
with the rest reporting that they are “not satisfied”.
•
74 per cent (up 2 per cent from 2009) are “very optimistic” or “optimistic”
about their financial future. The remaining 28 per cent are “worried” about
their financial future.
•
A third of the Singapore residents (33 per cent) surveyed set-out and follow a
monthly budget.
•
Almost half of those surveyed (49 per cent) set aside some money as savings
every time they get paid.
•
A significant majority of Singapore residents (81 per cent, up 4 per cent from
2009) pay off their credit card balance in full in the average month.
•
Seven in 10 Singapore residents (71 per cent, unchanged from 2009) believe
they have enough insurance to protect them and their families.
5
•
Only 27 per cent (unchanged from 2009) have a formal retirement plan while
19 per cent (up 8 per cent from 2009) have an up-to-date will.
Retirement savings and the role of CPF funds
•
Seven in 10 believe their CPF savings will provide only some or little of their
retirement income. Seven in 10 of these respondents already have an
alternative plan to supplement their retirement income. (See Chart 1 below for
more information)
•
More than two in five residents (41 per cent) say that the total amount of their
retirement savings is still behind where it was two years ago before the crisis,
while another 45 per cent say this amount remains the same as it was precrisis. (See Chart 2 below for more information)
•
To supplement their retirement income, 52 per cent would continue to work
for as long as possible, while another 52 percent would rely on the proceeds
of insurance policies and 51 per cent would turn to the proceeds of
investment products. ∗(See Chart 3 below for more information)
•
Of those who said they would rely on the proceeds of insurance or investment
policies to supplement their retirement income, 86 per cent hold whole life
insurance or intend to purchase whole life insurance to (70 per cent and 16
per cent respectively). The next most popular product were endowment plans,
with half of respondents owning such plans and another 21 per cent intending
to purchase them. (See Chart 4 below for more information)
•
One in five (22 per cent) feel they know how much retirement savings they
need and are on track in this area, while another 55 per cent were not sure
how much they need but had started saving.
•
One in four (27 per cent) have a formal retirement plan that had been
developed in consultation with a financial professional.
•
27 per cent have discussed their wealth transfer plans with family members or
a financial advisor. Only one-fifth (19 per cent) of Singapore residents
currently have an up-to-date will.
∗
Percentages, in this instance, do not add up to 100% as respondents were allowed more than
one option.
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Impact of global financial crisis and attitudes towards investing
•
Respondents are split down the middle on whether or not there will be
another major global financial crisis in the next 12-18 months (50 per cent
agree, 50 per cent disagree).
•
Half of respondents (51 per cent) have put the global financial crisis behind
them and are refocusing on planning for retirement.
•
The top three financial concerns of Singapore residents as the country
emerges from the crisis are re-building their savings; saving more for
retirement; and looking for a job that pays more.
•
39 per cent stopped investing during the crisis but are now open to investing
with the right opportunity, while 15 per cent have already started investing
again. Another 30 per cent stayed invested.
•
The most popular investment instruments are stocks (54 per cent) and mutual
funds/unit trusts (33 per cent).
Digital Banking
•
77 per cent believe that digital banking services have made managing their
personal finances much easier over the past few years.
•
80 per cent use online/Internet banking to help them do all their financial
transactions, while 77 per cent budget and manage their financials via
online/Internet banking.
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Chart 1
The Role of CPF Savings in Retirement
4
C PF w ill pr ovide
ALL of the income I
will need in
retirem ent
In very similar results to those from 2009,
relativel y few Singapore residents pla ce much
faith in the role these funds will play in
retirement.
•
While 31% (up 4% from 2009) suggest these
funds will provide “all” or “a ma jority” of the
income they will need in retirement), the
strong majority (70%, down 3% from 2009)
be lieve CPF savings will provide “only some” or
“very little” of their retirement income.
•
In a follow-up, two-thirds of Singapore
residents (66%) said they knew how they
would need for their retire ment.
•
When those who believed CPF savings would
provide “only some/very little” of their
retirement income, we re asked if had put in
place alte rnative plans to suppl eme nt their
incomes (70%) indicated they already had a
plan in place.
4
27
C PF will pr ovide A
MAJORITY of the
income I will need
in retirem ent
24
47
CPF will pr ovide
ONLY SOME of the
income I will need
in retirem ent
47
23
CPF w ill provide
VERY LITTLE of the
incom e I w ill need
in r etir ement
2010
•
26
2009
0
20
40
60
Note: Percen tag es may not
add to 100% due to rou nding
Citi Fin-Q Survey (Dec 2010)
Chart 2
Impact of GFC on Your Retirement Savings
The total amount
of my retirement
savings is
somewhat/well
ahead of where it
was before the
GFC
•
More than two-in-five Singapore residents
(41%) report that the total amount of their
retirement savings is still behind where it was
two years ago before the GFC.
•
Further evidence of the lingering impact of the
GFC is found in the fact that a nother 45%
report that the tota l amount of their retirement
savings is essentially the same as it was before
the GFC.
•
The de mographic data shows that those with
annual incomes under $50,000 (49%), those
30-39 years of a ge (47%) and those with
retirement savings under $30,000 currently set
aside (46%) were significantly more likely to
report that the tota l amount of their
retirements savings was still behind pre-GFC
levels.
19
The total amount
of my retirement
savings is
essentially the
same as it was
before the GFC
40
The total amount
of my retirement
savings is still
behind where it
was before the
GFC
41
0
20
40
60
Note: Percen tag es may not
add to 100% due to rou nding
Citi Fin-Q Survey (De c 2010)
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Chart 3
Sources of Extra Income Likely to Rely on
to Supplement Your Retirement Income
•
Asked which potential sources of extra income they would likely rely on to supplement their retirement
income, income generated by continuing to work as long as possible ties with the proceeds of insurance
policies (both selected by 52% of Singapore residents) were the top source of extra income followed closely
by the proceeds of investment products (51%).
Income generated by c ontinuing to w ork as l ong as
p ossible
52 %
The proceeds of insuran ce poli cies
52 %
The p roceeds of investment produc ts
51 %
The retirement savings I’m currently setting aside
44 %
42 %
Savi ngs generated by cutting back on expenses
Selling an investment property/properties
32 %
Cash g enerated by selling your existing prop erty f or cash
and dow ngrading to a smaller unit
Financial support provided by my child ren, spouse or
other family members
I have not thoug ht about w hat I will do to supplement my
retirement income
7%
Other
7%
28 %
22 %
0%
20 %
N ote: * Percent ages, in this instance, do not add up t o 100% as respondents were al lowed more than one opti on
40 %
60 %
Citi Fin-Q Survey (Dec 2010)
Chart 4
Insurance Policy/Investment Product
Ownership and/or Purchase Intent
•
•
•
Whole life insurance products are currently held by a significant majority of Singapore residents (70%) and a
further 16% re port intending to purchase whole life to supplement their retirement income.
The next most popular product were endowment plans (owned by 50% of Singapore re side nts and on the
purchase lists of another 21%).
One product clearly not of interest to Singapore re sidents at the moment are reverse mortgages which 75%
say they do not intend to purchase to supplement their retirement income.
Wh ole life ins uran ce
70
16
50
En do w men t p lans
Mu tual fu nd s
21
33
29
24
43
Ann uity pro du cts
21
40
39
Lon g-term bo nd s
21
38
41
Revers e mo rtg age
5
0%
20
15
75
20%
4 0%
60%
Alre ady ow n
Pl an t o pur cha se
Note: Percen tag es may not
add to 100% due to rou nding
80%
1 00%
D on't pl an to pur cha se
Citi Fin-Q Survey (Dec 2010)
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