S’pore residents have more financial assets than peers elsewhere
Residents in Singapore on average have more financial assets such as cash, stocks and bank deposits than their peers elsewhere, a global wealth report said.
Allianz’s global research team in Munich attributed this to Singapore’s capital-funded pension system, the Central Provident Fund (CPF).
The Allianz global wealth report issued recently placed Singapore fourth globally in 2023 with net financial assets per capita at €171,930 (S$246,000).
The United States was in pole position with net financial assets per capita of €260,320. Switzerland came in second with €255,440, followed by Denmark, which pipped Singapore by a whisker with €172,200.
Singapore is top in the region, comfortably ahead of Taiwan, which ranked fifth at €148,750, and Japan, at 12th with €91,940.
The report, which is into its 15th edition, looks at the asset and debt situation of households in almost 60 jurisdictions.
Led by healthy income gains of private households, Singapore’s gross financial assets in 2023 grew 5.8 per cent – almost twice as fast as in 2022.
Securities and bank deposits were the asset classes that drove this, but insurance and pensions lagged.
When asked, Allianz said the growth in life insurance and pension assets in 2023 was still below the long-term average. The report found that growth in liabilities in Singapore was muted at 1 per cent.
The global financial services firm said a reason why liabilities have not grown substantially in 2023 is because households were cautious about taking out new loans as interest rates climbed.
“Singaporean households have been quite successful in recent years in trimming their debt burden. The debt ratio reached 54.1 per cent at the end of 2023, some 20 percentage points below the levels seen only 10 years ago,” it noted.
However, the picture is less rosy in real terms.
Factoring in inflation, Allianz said the increase in real financial assets in 2023 was 0.9 per cent, which is below the 2021 level and higher than the pre-pandemic level.
Moving forward, the firm said insurance and pension assets are the dominant asset class, and account for almost half of Singapore residents’ financial wealth.
“Given the rapidly ageing population, we expect insurance and pensions to remain the most important asset class in the future,” it added.
The firm said it had culled data for Singapore from the country’s Department of Statistics. Typically, data sources include national central banks, the supervisory authorities and statistical offices, as well as insurance and asset management associations.
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