Over a quarter of Gen Zs in Singapore are financially unprepared

A survey conducted by the Singapore-based lender found that around 26% of Gen Z respondents in the city-state said they met none of the four rules of thumb listed in the Basic Financial Planning Guide created by the finance industry and the Monetary Authority of Singapore, The Straits Times reported.

These guidelines involve maintaining an emergency fund that covers three to six months' worth of expenses, securing insurance for death, total permanent disability, and critical illness, investing at least 10% of net income toward retirement and other financial goals, and preparing wills and Central Provident Fund (CPF) nominations.

CPF is a mandatory social security savings scheme supported by contributions from both employers and employees. A CPF nomination guarantees that CPF savings will be distributed to the holder’s loved ones after their passing.

Only 17% of Gen Z participants have critical illness coverage and just 13% of them have death and total permanent disability insurance, The Business Times reported. Gen Zs are also less prepared in terms of legacy planning compared to other groups.

Nonetheless, they are keen on investing, with 55% of respondents checking off the guideline on investment, and saving for emergencies, with 59% holding sufficient rainy day funds.

The survey, part of UOB’s ASEAN Consumer Sentiment Study 2024, included 5,000 individuals aged 18 to 65, with 1,000 respondents each from Indonesia, Malaysia, Singapore, Thailand, and Vietnam.

Besides Gen Z, it also found that only 10% of respondents across all age groups followed at least three guidelines, 37% met two, and the rest fulfilled one or none of the basic rules of thumb, according to UOB’s press release via PR Newswire.

These findings suggest that a large percentage of Singaporean consumers are falling short in securing their financial future, with Gen Zs most at risk.

Jacquelyn Tan, head of group personal financial services at UOB, said the study has underscored the need for young Singaporeans to bolster their financial preparedness.

"We believe that they are taking positive steps, for example by setting aside sufficient emergency funds and investing for their future, but they require more help in insurance coverage and legacy planning," she noted.