AIA Singapore unveiled findings today (6 Feb) from the seventh edition of its AIA Live Better Study, showing that 83% of Singapore residents plan to take active steps to manage their finances amid expectations of sluggish economic growth in 2025.
Conducted in November 2024, the study examined financial, health, and wellness concerns against the backdrop of inflation, rising living costs, and job uncertainties.
The survey reveals a significant generational divide in financial preparedness. Over half (54%) of respondents aged 18–29 feel ready to face the challenging economic conditions ahead, while only 34% of those aged 40–49 share the same confidence.
Many in their 40s, often described as the “sandwiched generation” due to their dual responsibilities of caring for children and ageing parents, are more financially burdened and pessimistic about the future.
Economic concerns and coping strategies
The study indicates that only 47% of Singapore residents are optimistic about the economy in 2025. Key concerns include inflation and the rising cost of living (50%), job security (35%), and income levels (34%).
Despite these worries, Singapore residents are displaying resilience, with 54% highlighting long-term financial preparedness as a top priority this year, compared to previous years.
The main strategies for achieving financial security include maintaining savings (62%), ensuring a stable income (57%), and building emergency funds (52%).
Notably, 48% of residents consider insurance a critical part of their financial plans, reflecting a growing understanding of its role in long-term stability.
Changing financial habits
Faced with economic uncertainties, residents are taking proactive measures:
- Spending cutbacks: About 59% plan to reduce daily expenses and big-ticket purchases.
- Savings and investments: Many aim to build emergency funds (29%), save for retirement (28%), and diversify investments (27%).
- Increased spending on financial products: Over one-fifth plan to boost their investments (27%) and insurance purchases (22%) in 2025.
Irma Hadikusuma, Chief Marketing and Healthcare Officer at AIA Singapore, highlighted the resilience displayed by residents.
“This reflects a maturing society with a better understanding of the importance of early financial planning, especially as Singapore celebrates its 60th year of independence,” she said.
Healthcare costs and financial preparedness
The rising cost of healthcare is a major concern, with more than half (53%) of Singapore residents perceiving it as expensive.
However, only 47% feel adequately prepared to handle these expenses. To address this gap, residents are relying on a mix of solutions, including insurance plans (57%), personal savings (56%), and government healthcare schemes (49%).
Health Minister Ong Ye Kung has previously emphasised the importance of addressing healthcare affordability, a sentiment echoed in AIA’s findings. Both public and private sector support is deemed necessary to alleviate financial pressures related to healthcare.
Generational differences: Optimism vs. caution
A striking difference in mindset is evident between younger Singaporeans and those in their 40s. While 56% of residents aged 18–29 are optimistic about the economy, only 38% of those aged 40–49 share this sentiment.
The younger generation is less concerned about inflation and cost-of-living pressures (34%) compared to those in their 40s (63%).
They are also less likely to cut back on spending, with only 34% planning to reduce daily expenses, compared to 47% of their older counterparts. Similarly, 35% of young adults plan to limit big-ticket purchases, versus 45% of those in their 40s.
This difference can be attributed to life stages. Younger residents, many of whom are starting their careers, are focused on enjoying life experiences. In contrast, those in their 40s face multiple financial responsibilities, including family and retirement planning.
Job security and career preparedness
Employment stability remains a key concern across age groups. About 47% of those aged 18–29 and 61% of those in their 40s consider stable employment crucial for their overall well-being. However, their strategies differ:
- Upskilling: 40% of younger residents plan to enhance their skills, compared to 28% of older respondents.
- Savings and emergency funds: Those in their 40s are more focused on building savings (55%) and emergency funds (46%) to buffer against job losses.
The types of support sought also vary. Younger respondents prioritise mental health and well-being support (40%), while older residents value practical assistance, such as job placements (52%) and online training (47%).
Despite their differing approaches, both generations share a common goal: achieving financial stability in uncertain times.
