SINGAPORE (July 15): The good news is that while the average Singaporean has embarked on his journey towards financial wellness, it’s going to take some time for him to reach his destination.
This is according to OCBC Bank, which has launched Singapore’s first Financial Wellness Index - a survey of Singapore’s state of financial health with an inaugural sample of 2,000 working adults aged 21 to 65.
The survey found that while Singaporeans saved regularly, had insurance coverage and stuck to a budget, many still lag behind when it came to growing their wealth through investing or building funds for a rainy day or retirement. In addition, about a third of respondents said that they thought of investing as a form of gambling – a view deemed worrying by the bank.
OCBC had put together a list of 26 indicators that, when taken together, paint a picture of one’s financial wellness. The indicators include management of unsecured debt, gambling more than one can afford to lose, spending beyond means to keep up with peers, paying off of housing loan, taking steps to be healthy, meeting family’s financial needs and maintaining lifestyle after retirement.
Based on their overall score, respondents were classified into various categories of financial wellness – 0-24: respondents who had hardly taken any action on most indicators; 25-49: those who have just started or are intending to start; 50-74: those who have started but are behind on most indicators; and 75-100: those ahead on almost all indicators. For the average Singaporean, the overall index score came in at 63.
Singaporeans also did poorly when it came to having a regular passive income, controlling excessive speculation and lacking investment. Some 34% of respondents said they did not invest, while 48% did not have any source of passive income.
OCBC Bank’s head of group brand and communications Koh Ching Ching says, “We believe that this is the first and most comprehensive financial wellness survey ever conducted in Singapore, and we will conduct this index every year and aim for it to become the definitive benchmark of financial wellness in Singapore for years to come.”
But with the plethora of financial education tools and information available, Koh expects this score to increase in the near future, especially with the improvement of financial literacy amongst Singaporeans.
OCBC Bank’s Wealth Management Team has launched the OCBC Financial Masterclass, a structured literacy financial course to address the gaps in financial knowledge discovered in the Index consists of four video modules, while the OCBC Wealth Hacks consists of a series of 10 short videos providing quick tips on how to improve certain aspects of their financial wellness.
Tan Siew Lee, OCBC’s head of wealth management for Singapore, says, “Every step towards better financial wellness helps. Our Masterclass is therefore designed to give practical tips that people can apply in their daily lives.”
OCBC has plans to move this initiative into Malaysia and Hong Kong next.