Singaporeans need to save for 27 years to achieve financial freedom: Singlife

1 in 4 Lion City residents have savings of less than $1,000 per month, below the average S$1,733.

The average Singaporean will take at least 27 years to accumulate enough savings to feel financially free, according to a report by insurer Singlife.

Singlife’s inaugural Financial Freedom Index–which surveyed 3,000 Singaporeans and permanent residents (PRs) aged between 18 and 65 between December 2022 and January 2023–found that Lion City residents need median savings of S$566,640 to feel financially free.

With respondents’ monthly media savings of S$1,733 per month, this meant that they will need to save S$1,733 per month for at least 27.3 years to achieve financial freedom.

The ability to save money may be an issue, however for 1 in 4 of Singaporeans or 25% of respondents told Singlife that they save less than $1,000 per month.

Consumers identified the ability to retire at any time, and having enough money to give back to society, as the top two indicators of financial freedom.

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Rate of saving
Both the financially constrained individuals and those who rated themselves financially free save approximately 50% of their monthly personal income, Singlife found.

Respondents were divided into three groups based on their personally reported level of financial freedom. About 29% of those surveyed rated themselves financially free (between 8 to 10 on the scale) and have an average monthly personal income of S$9,067. They save 51% of their monthly income, at a value that is roughly three times more than the average consumer, at S$4,629 on average.

The everyday consumer, which makes up 54% of the respondents, rate themselves between 4 to 7 on the scale. They are found to have an average monthly personal income of S$5,652. Everyday consumers, meanwhile, save 45% of their monthly personal income, resulting in an average monthly saving of at least S$2,593.

Finally, the financially constrained, making up the remaining 17% of consumers, rates themselves a low 1 to 3 on the scale. They have an average monthly personal income of S$3,442, Singlife said. Financially constrained individuals save 50% of their monthly personal income, resulting in an average monthly saving of at least S$1,728, Singlife’s study found.

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Spending Habits
Within the financially free group, 38% feel comfortable spending on their needs and wants, whilst 43% indicated the same from the everyday consumer group.

About 4 in 5 or 80% of financially free individuals are confident in their ability to pay off monthly bills. In contrast, only 2.5 in 5 (or 1 in 2) of everyday consumers said the same.

Just below 2 in 5 or 39% of financially constrained individuals are confident in their ability to pay off their monthly bills.