Big earners saving most of their cash: survey

Business Times - 22 Jul 2009

By JOYCE HOOI

FORGET the 'flight to quality' in turbulent times - locals have gone one better and are doing nothing with their money.

After seeing the bottom fall out of financial markets, more high-income earners here are saving most of their cash instead of putting it in investments or insurance.

A Nielsen survey found a 13 per cent spike in the number of high-income respondents who put most of their cash in savings - from 39 per cent of respondents before the financial crisis to 52 per cent after. High-income earners were defined as respondents who earn more than $7,000 a month.

This switch to savings came at the expense of investments, which dropped 7 per cent to 36 per cent.

Insurance also fell out of favour, with only 4 per cent of respondents putting most of their money in it, versus 10 per cent before the crisis, perhaps an unsurprising development given people have less to lose, hence, less to insure, post-crisis.

The trend was replicated across various income groups, though less pronounced. Overall, the number of respondents saving most of their money increased from 54 per cent to 57 per cent.

A global Nielsen survey in April foreshadowed this outcome. 75 per cent of 500 Singaporeans surveyed said they intended to save excess cash. Only a quarter said that they would invest in stocks or mutual funds.

'It is worth noting that in the past several years in which the Nielsen consumer confidence survey has been carried out, Singapore has always been among the three countries with the greatest number of people expressing their intention to save spare cash,' said Joan Koh, executive director of The Nielsen Company Singapore.

'We are definitely a cautious lot who are more comfortable putting our hard-earned money in fixed deposits and saving for a secure tomorrow.'