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In general, a savings gap occurs when our current level of savings is insufficient to meet our financial goals. Despite being prudent savers, with an average personal savings rate of more than 30% over the last 10 years, cost-of-living concerns has become a hot topic in Singapore.
One of the main culprits of the spiralling common household expenses is the persistently high inflation rate. On top of this, Singaporeans’ purchasing power will also be eroded by higher GST in 2023 (from 7% to 8%) and 2024 (from 8% to 9%).
Exacerbating the problem our real median income had taken a hit – dipping 4.5% in the first half of 2023. Growing our savings is only going to become even more challenging.
It’s no surprise then that Singaporeans are very concerned about their personal finances. According to the Hong Leong Finance (HLF) Consumer Financial Survey 2023, the top three financial concerns that Singaporeans had include:
#1 Rising Cost of Living In Singapore
The Consumer Price Index (CPI) in Singapore has spiked since 2022. As a trade-dependent economy, Singapore cannot avoid rising prices of goods globally. This has resulted in the CPI rising 5.2% and 7.0% in the 1st and 2nd halves of 2022.
In the first half of 2023, the CPI has already hiked another 5.6%.
| Singapore All-Items Consumer Price Index (CPI) | % Change |
| 1H 2022 | 5.2% |
| 2H 2022 | 7.0% |
| 1H 2023 | 5.6% |
Source: Singapore Department of Statistics
Rising cost of living was also listed as the biggest financial challenge in HLF’s Consumer Financial Survey. To alleviate the immediate impacts of the rising cost of living in Singapore, the Singapore Government announced a supplemental Cost-of-Living (COL) support package in September 2023.
#2 Saving For Retirement Or Future Financial Goals
33% of Singaporeans turning 55 are not able to set aside the Basic Retirement Sum (BRS) in their CPF accounts. Even those who are able to save the BRS will only receive a monthly payout of $850 a month when they eventually turn 65.
This amount is unlikely to be sufficient today, let alone in 10 years. A 2019 study by the Lee Kuan Yew School of Public Policy found that seniors each need at least S$1,379 monthly to meet basic needs in Singapore. This study itself is already 4 years old, and the figure needs to be adjusted for inflation.
It’s not surprising then that 53% of respondents in HLF’s Consumer Financial Survey 2023 said that saving for the future was a top 3 financial concern.
Worryingly, the HLF Consumer Financial Survey also captured nearly half of the respondents indicating that they were only able to save 10% or less of their disposable income. Left unchecked, this may snowball into a retirement crisis.
Only 65% of them indicated they were relying on CPF funds, while 36% indicated investments as a top 3 retirement income source.
#3 Managing Daily Expenses And Budgeting Effectively
Stats from the Singapore Department of Statistics can depict a clear picture of how much more consumers are paying for their daily expenses.
We can see that prices for Transport, Food and Housing & Utilities (the top 3) surged the most in 2022. These are also likely to be the things average consumers in Singapore cannot avoid, and may find challenging to cut back on.
| No. | Basket of goods and services consumed by Singaporeans | % Change in 2022 |
| 1 | Transport | 16.4% |
| 2 | Food | 5.3% |
| 3 | Housing & Utilities | 5.2% |
| 4 | Household Durables and Services | 4.9% |
| 5 | Recreation & Culture | 4.3% |
| 6 | Clothing & Footwear | 2.8% |
| 7 | Health Care | 2.2% |
| 8 | Education | 2.1% |
| 9 | Miscellaneous Goods & Services | 0.5% |
| 10 | Communication | -1.2% |
Source: Singapore Department of Statistics
Savers Looking For Higher Interest Rates To Cushion Against Financial Concerns
Against the backdrop of high inflation and rising cost of living, Singaporean savers are looking for a bigger bang on their savings. This was the highest priority feature in an ideal savings account for respondents in HLF’s Consumer Financial Survey 2023.
Source: HLF Consumer Financial Survey 2023
Armed with a deeper understanding of what savers in Singapore want, Hong Leong Finance (HLF) designed their fuss-free savings account with attractive daily interest returns to meet these needs.
Thus, the HLF Premium SAVER account was born. Savers can immediately start enjoying a base interest rate of 1.88% without any strings attached. We don’t have to ask HR to credit our salary into yet another different savings account, we don’t need to spend unnecessarily just to hit a minimum credit card spending, and we don’t have to make or transfer in any other financial transactions within the Hong Leong Finance umbrella.
With 73% of the respondents in their survey relying on personal savings as their top 3 retirement fund sources, HLF has removed arbitrary caps on their savings account. Instead, they reward savers who want to keep as much of their savings – up to $5 million – with them.
Source: HLF
For those who start saving just the minimum amount (i.e. from $500), we can start earning 1.88% p.a. in interest returns. Those who save more than $100K will earn 2.00% p.a. in interest returns from our first dollar – and not just on amounts higher than $100,000.
Similarly, we stand to earn up to 2.50% p.a. in interest returns on our entire savings above $300K (and up to $5 million) in our HLF Premium Saver account.
Doing away with unnecessary hindrances, the HLF Premium SAVER account has no fall-below fee, lock-ins or caps on daily withdrawals. Furthermore, we don’t have to worry about our average monthly balances in the account as interest rates are computed on a daily basis – while they are credited on a monthly basis.
Opening an HLF Premium SAVER account is also simple and convenient. We simply need to visit one of the 28 Hong Leong Finance branches islandwide and make a minimum initial deposit from $500.
With over 60 years of history in Singapore, Hong Leong Finance (HLF) is Singapore’s largest finance company. Today, HLF has a network of 28 bank branches and 12 SME Centres islandwide, and was recognised as the ”ASEAN Best Finance Company” at the Asian Banking and Finance’s Retail Banking Awards 2023.
As a deposit insurance scheme member, our Singapore Dollar (SGD) deposits are insured by the Singapore Deposit Insurance Corporation (SDIC), for up to S$75,000 per depositor per Scheme member.
From now till 31 December 2023, the first 100 savers who open an HLF Premium SAVER account will enjoy a $30 ROYCE’ Chocolate Voucher as a Signup Reward. All we have to do is:
Step 1: Register online via the Participation Form (on the HLF website) by 31 December 2023.
Step 2: Maintain a minimum deposit of $2,000 in the account by 31 January 2024.
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