Why nearly half of S’poreans feel hopeless reaching financial freedom

The average consumer owns 3 types of insurance, but only 57% have life coverage.

It could now take Singapore consumers around 30 years to achieve financial freedom, nearly three years longer than last year. This increase is attributed to the rising median amount required for financial freedom, now estimated at S$612,045, up 8% from the previous year, revealed Singlife’s Financial Freedom Index 2024 report.

Additionally, most consumers have an average of three types of insurance products, only 57% are aware of or claim to have life insurance coverage. Even fewer, just 38%, report having coverage for critical illness. 

Industry guidelines recommend life insurance coverage of at least nine times one’s annual income, but the survey revealed that the median coverage amongst respondents is just S$286,670—less than half of the recommended amount.

The survey also indicated that the average score on the Financial Freedom Index has dropped to 58 out of 100, down from 60 in 2023. Where 100 is the highest level of financial freedom.

A significant portion of Singaporeans are sceptical about ever achieving financial freedom, with 44% of respondents expressing doubt. 

Key obstacles included insufficient income (53%), unforeseen expenses (38%), job insecurity (32%), and debt repayment burdens (28%). 

Despite these challenges, there is a slight increase in the number of people who believe they know how to achieve financial freedom, up to 55% from 49% last year.

The survey, conducted amongst 3,000 Singaporeans and Permanent Residents aged 18 to 65, also highlighted concerns regarding retirement. 

Most respondents aim to retire by 65 and estimate they will need a median of S$2,856 per month for daily expenses. However, with median monthly savings at S$1,682, there is a noticeable gap in retirement preparedness. 

Additionally, over 40% of respondents believe that having a child could delay their financial freedom by an average of 14 to 15 years.