New report shows Gen Zs need more help in insurance coverage, legacy planning
Gen Z employees in Singapore are not taking adequate steps to secure their financial future, prompting calls to boost assistance to these group of employees, according to a new report from the United Overseas Bank (UOB).
UOB's ASEAN Consumer Sentiment Study 2024 found 26% of Gen Zs do not meet any of the four rules of thumb identified by the Monetary Authority of Singapore and financial industry's Basic Financial Planning Guide.
The four rules of thumb include:
- Allocating three to six months' worth of expenses as emergency funds
- Obtaining insurance protection for death, total permanent disability, and critical illness
- Investing at least 10% of take-home pay for retirement and other financial goals
- Making wills and Central Provident Fund (CPF) nominations
According to the report, only 59% of Gen Zs hold sufficient emergency funds, or have at least three months' worth of expenses as a buffer for financial emergencies.
It also found that Gen Zs are behind when it comes to insurance, where only 17% have critical illness coverage and 13% have total permanent disability insurance.
"More alarming, more than one in 10 Gen Zs (12%) said they did not possess any insurance at all," the UOB's report read.
Gen Zs were also found to be less prepared than their older counterparts when it comes CPF nominations, as only 29% of them have made CPF nominations. Only 10% of Gen Zs have also written their will, according to the report.
On the other hand, Gen Zs appear to be "diligent" on investing, with 55% of them abiding by this rule of thumb.
Offering Gen Zs more help
Jacquelyn Tan, Head, Group Personal Financial Services, UOB, said the findings indicate the need for the youth to boost 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," Tan said in a statement.
Financial wellbeing is the top concern of Singaporean employees in the latest report from WTW.
However, only eight per cent of employers are prioritising financial wellbeing in terms of benefits programmes, as most organisations focus on employee experience, emotional wellbeing, and physical wellbeing.
Tan stressed that it is "eminently possible" for the youth to enjoy finer experiences in life while also safeguarding against unforeseen circumstances.
"We are here to help our young customers achieve their desired lifestyles while building sustainable financial buffers for life’s uncertainties," she said.
