Seedly x Milieu Survey: Here's How Inflation Has Affected Singaporeans in 2022!
Have you been feeling the effects of inflation and the rising costs of living?
Don’t worry, you’re not alone!
According to a recent report in collaboration with Milieu,
8 in 10 Singaporeans feel that their financial situations have been affected in the past year due to inflation!
But who are the 20% who don’t feel these effects? And how has inflation affected other Singaporeans?
Here’s an in-depth look at how inflation has impacted Singaporeans based on the Seedly x Milieu: The Impact of Inflation Report!
TL;DR: How Inflation Has Affected Singaporeans in 2022
Inflation has caused the cost of living in Singapore to rise over the past year and is of great concern to Singaporeans.
Hence, in order to take a closer look at the impacts that inflation has on Singaporeans, Seedly has collaborated with Milieu Insight to survey Singaporeans on how inflation has impacted the various aspects of their lives.
Disclaimer: The Seedly x Milieu Insight: The Impact of Inflation report is based on an online survey with N=1,000 Singaporeans aged 16 years old and above, conducted via Milieu Insight’s online proprietary panel from 30 November 2022 to 5 December 2022. The results are broadly representative of the national population by age and gender (interlocking quotas), ethnicity, and household income (non-interlocking quotas), and the margin of error is +/-3% at 95% confidence level. Any opinions stated in this article are of the writer only and are not representative of Seedly.
According to the survey, 8 in 10 Singaporeans feel that their personal financial situations have been affected ‘somewhat’ or to a ‘large extent’ in the past year due to inflation.
Moreover, 95% of Singaporeans are ‘very’ or ‘somewhat’ concerned about inflation.
It is clear that inflation is a hot topic on our minds.
But how exactly has inflation impacted us?
From our survey responses, the top three most common areas impacted by inflation are:
- Spending on necessities (eg. food, electricity) (71%)
- Retirement plans (34%)
- Investments (26%)
The impact of inflation becomes more apparent in households with lower income too.
For context, the median gross household income in Singapore is $8,220.
Households earning $3,000 – $5,999 tend to be more impacted by inflation in terms of spending on necessities (79% versus 71% national average).
The survey also found that those with higher household incomes (>$12,000 HHI) tend to report a lower impact of inflation on their household financial situation (69% were affected somewhat or to a large extent, versus the 80% national average).
While these statistics may seem obvious to some, the survey now gives us more supporting evidence that low to middle-income households are impacted by inflation more than high-income households.
That said, the government has been stepping up with its various government support packages.
In our findings, 31% of Singaporeans are ‘very’ or ‘somewhat satisfied’ with the Singapore government’s measures to help Singaporeans cope with inflation. Meanwhile, 24% are dissatisfied and 46% are neutral.
Interestingly, 37% of employed Singaporeans have at least one side income.
It was found that younger Singaporeans (16 to 34) tend to have at least one side income, while 83% of employees aged 55 or above do not have a side income.
This could be the effect of hustle culture on young Singaporeans and also due to older employees being farther in their careers with more pay. Thus, in an effort to supplement their main income, younger Singaporeans are more likely to take on side hustles.
Housing has always been near and dear to our hearts.
After all, we are in a land-scarce island nation with the affordability of housing constantly in question.
It probably comes as no surprise then that 9 in 10 Singaporeans are ‘very’ or ‘somewhat concerned’ about rising home prices.
The survey found that 32% of Singaporeans intend to buy a house in the next five years with Singaporeans aged 25 to 44 being more likely to have the intention of buying a house in the next five years:
BTO flats remain the most popular housing type among Singaporeans (44%), followed by resale HDB flats (27%).
The COVID-19 pandemic had resulted in construction delays of new housing projects, and Singaporeans without the luxury of time have turned to the resale market or private housing. There is a higher skew towards Singaporeans aged 35 to 44 years old who intend to buy private housing in the next 5 years (34%).
More importantly, rising home prices have affected 71% of Singaporeans and impacted homeownership plans for couples expecting a child.
We found that inflation had the second largest impact on home ownership plans (55%) among couples expecting a child.
Therein lies the problem for Singapore. It’s a no-brainer that the nation’s biggest asset is its citizens. But if we are to have children, a house would be imperative. Yet, rising home prices are hindering couples from having kids.
Therefore, it is the Government’s duty to keep (public) housing affordable. There have been plenty of cooling measures over the years to tame the rise of home prices, but with our survey results, it seems that the government is still not doing enough, according to the people’s standards anyway:
As you can see, only 19% are ‘very’ or ‘somewhat satisfied’ with the Singapore government’s measures to keep housing prices affordable while 41% of Singaporeans are dissatisfied with the current housing measures. The percentages go up even higher for those more likely to get a house in the next five years (25 to 44 years old).
- What’s Really Driving Up Singapore’s Property Prices?
- Is Public Housing Still Affordable For The Average Singaporean Couple?
- Buying an HDB Resale Flat in 2022: How Much Do You Need To Be Earning?
For those of us who have been investing, you’ll know that 2022 has been an atrocious year with the S&P 500 falling more than 20% year to date (YTD) at one point.
Thanks to the Fed and its aggressive interest rate hikes in its attempt to combat inflation in the U.S., many U.S. stocks have come crashing down. The ripple effect has also been felt across the world as the world’s largest economy raises its interest rates.
Cryptocurrencies weren’t spared either with Bitcoin, the largest cryptocurrency by market capitalisation, down by almost 62% YTD.
As a result, 65% of Singaporean investors are now investing less actively and/or taking lower risks compared to the same period last year.
From our findings, male investors tend to have a higher investment risk appetite than females.
The top three investment vehicles among Singaporeans now are stocks (39%), investment funds (25%), and bonds (24%).
The data also shows that Singaporeans in higher-income households are more likely to be invested:
- 89% of Singaporeans with HHI >$12,000 are invested
- 82% of Singaporeans with HHI $9,000 to $11,999 are invested
- 82% of Singaporeans with HHI $6,000 to $8,999 are invested
- 68% of Singaporeans with HHI $3,000 to $5,999 are invested
- 49% of Singaporeans with HHI <$3000 are invested
49% of Singaporeans are confident that they can financially sustain themselves and/or their loved ones for the next 6 to 12 months.
However, lower-income households tend to be less confident.
56% of those unemployed have income sources (eg. allowances, investments) or savings that will be able to financially sustain them for the next 6 months.
In general, Seedly recommends 6 to 12 months’ worth of emergency funds. So if you happen to be the 51% who aren’t confident of sustaining yourself financially, it’s time to save up!
All in all, Singaporeans have been impacted largely by inflation and even more so for those who aren’t earning as much.
The rising cost of living has mostly impacted spending on necessities and delayed several financial decisions among Singaporeans such as owning a home. While Singaporeans are generally accepting of the government’s approach to tackling inflation, many are dissatisfied with how the government is handling public housing now.
When it comes to investments, it is clear that many Singaporeans are more cautious and investing less, most likely due to increased spending in other areas as well as fear of a bear market.
On the bright side, almost half of those surveyed were confident that they can financially sustain themselves at least for the next 6 to 12 months.
Want to read the full report? You can access it for free on Seedly Rewards:
How are you coping with inflation yourself? Has inflation impacted you greatly? Share it with us in the comments below!