PETALING JAYA: Ordinary Malaysians are in a vulnerable position to face 2023 as the world braces for an economic recession and continued high inflation next year.
Data from the RinggitPlus Malaysian financial literacy survey 2022 reveal the worsening financial straits of a majority of Malaysians, who are facing financial distress, cashflow issues and depleted savings exacerbated by the Covid-19 pandemic and high inflation.
The survey results, unveiled today by financial comparison website RinggitPlus, reveal that seven out of 10 respondents save less than RM500 per month or do not save at all. This is the worst it has been in five years.
The results indicated only 5% of Malaysians save more than RM1,500 per month. This is down 15% compared to 2021 and 20% in 2020.
The survey also reveals Malaysians are struggling to get by with less savings in hand as 63% of respondents can only survive three months or less with only their savings compared to only a year ago, which was 51%.
But conflictingly, 71% of respondents do believe that they are in control of their money, although 43% spend exactly or more than what is earned each month.
On the retirement front, 82% of Malaysians think their Employees Provident Fund (EPF) savings are not enough. Amongst those who think so, 41% have not prepared for old age, and 66% would consider withdrawing funds if EPF would allow it.
Investment wise, 52% of those above 18 years old have not begun investing. Of those who have, 52% of respondents have rather low risk appetites and prefer capital preservation.
In that same group, 50% of them prefer medium-term investments of 5-10 years. The top three preferred investments favoured were unit trusts, stocks and cryptocurrencies.
When it comes to awareness, 59% of respondents do not know or are completely unaware of what a credit score is, and 32% do not even know the benefits of having a good score.
On a more shocking note, only 55% of credit card holders pay their bills in full every month. The remaining either pay the minimum amount (18%) or whatever amount they are able to afford at that time (27%).
RinggitPlus co-founder Hann Liew said the financial effects of the pandemic have been devastating and the survey findings this year reaffirm that Malaysians have real financial challenges to address.
“This reality is harsh not only for the rakyat but also for policymakers and industry players. This is a generational issue that requires long-term solutions with sustained and concrete support from all parties”.
“We cannot leave anyone behind,” Liew added.
The survey was conducted in three languages, sampling 3,144 Malaysians above 18 years old from all walks of life.
Source: https://www.freemalaysiatoday.com/category/business/2022/12/06/malaysians-on-the-edge-of-disaster-financially/