43% of Southeast Asians Save Just 10% of Their Income, Says Study

Written on:
March 20, 2024
Milieu Team

This content was produced by AsiaBizToday in collaboration with Milieu Insight.

SINGAPORE, 20 March 2024 – Leading Southeast Asian survey software provider Milieu Insight has released its most recent research on the region’s investing and personal financial practices. The extensive six-market survey, which involved 3,000 respondents from Singapore, Malaysia, Indonesia, Vietnam, Thailand, and the Philippines, provides insights on people’s credit card ownership, payment patterns, and perceptions of success.

As per the survey, being financially secure and having sufficient resources for retirement are the most important indicators of success in life for Southeast Asians, second only to being in good health. The importance of financial well-being in the area is highlighted by the fact that 52% of respondents agreed with this statement. 43% of Southeast Asians save just 10% of their income and over half (54%) of respondents are not actively placing their money into investments, potentially missing out on wealth accumulation and financial growth opportunities.

Financial literacy crisis

However, the report reveals a concerning trend where over 4 in 10 of Southeast Asians save only up to 10% of their income, indicating a pressing need for greater financial literacy and planning initiatives. This highlights the need for empowering individuals with the right knowledge and tools necessary for them to build proper financial habits.

“The Milieu Insight study on savings habits across Southeast Asia shows there’s a clear call and need for enhanced financial literacy and planning in the region. With 46% across the region investing and a significant portion doing so sporadically, there’s a pressing need to equip individuals with the knowledge and tools necessary to make informed financial decisions. The report also highlights that Southeast Asians are open to professional financial advice, demonstrating a willingness to seek guidance and expertise to navigate the complexities of personal finance and investments,” said Juda Kanaprach, Co-founder & CCO, Milieu Insight.

Southeast Asians are missing out on wealth accumulation

While approximately half of Southeast Asians own and use a credit card, there are significant disparities across different countries, with Indonesia reporting the lowest ownership and Singapore leading the pack. Nevertheless, 68% of credit card holders in Southeast Asia pay their balances in full most of the time, demonstrating responsible financial management among a majority of users.

Conversely, over half (54%) of respondents are not actively putting money into investments, potentially missing out on wealth accumulation and financial growth opportunities. This trend may be influenced by various factors such as low financial literacy, limited access to investment opportunities, and preferences for saving over investing.

A strong appetite for investing

On the investment front, the report also shows that nearly half (46%) of Southeast Asians actively invest their money, with 58% allocating up to 20% of their income towards investments. However, 1 in 5 adopt an ad-hoc approach to investing, indicating potential room for improvement in financial planning strategies.

Among all countries surveyed, Singaporeans are the frontrunners in active investing, with an impressive 59% indicating they invest their money compared to 46% across the region.

Stocks, fixed deposit plans, and mutual funds are the top three areas of investment among Southeast Asians, driven primarily by retirement security, wealth growth, and regular income. Despite this strong appetite for investment, individuals cite fear of losing money, long investment timelines, and fear of missing out on opportunities as the top challenges they face.

The report also found that Southeast Asians exhibit openness to professional financial advice, with 60% stating that it increases their confidence. Among those who invest, 49% rely on advisors as their top source of guidance, highlighting the value placed on expert insight in financial decision-making processes.

The study, conducted via Milieu Insight’s proprietary survey community, offers a comprehensive understanding of the financial behaviours and attitudes prevalent among Southeast Asians. Representative of the online adult population aged 16 and above, the fieldwork was carried out from January to February 2024.

For more information and background on the report, please visit Milieu Insight Southeast Asia Finance and Investment Report.

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