● Report shows that majority of people in Asia fear they will need to postpone their retirement due to family responsibilities.
● With longer lives and potentially more years in retirement, taking concrete actions in financial planning, including use of digital tools and exploring sources of passive income, is critical during working years.
Manulife Investment Management globally released its Financial Resilience and Longevity Report. Findings in Asia, which includes Mainland China, Hong Kong, Japan, Singapore, Malaysia, Indonesia, Philippines, and Vietnam, revealed that consumers across the region continue to face financial challenges, despite some markets and demographics faring better than others.
In the Philippines, 67% of Filipinos expressed confidence in achieving their top financial goals, with many optimistic that their financial situation will improve over the next decade. However, 63% are concerned that insufficient savings may hinder their ability to build financial resilience. Additionally, 61% worry about unexpected medical expenses, and 37% are concerned about reduced income—factors that pose significant challenges to strengthening their financial security.
More than two-thirds of people in Asia are confident they will be able to achieve their top financial goal, which varies across markets and includes having enough saved for emergencies, managing or maintaining their current lifestyle, and enjoying financial freedom or security after retirement, but the older generations are in slightly worse shape, with those in their 50s and 60s less likely to have that confidence than their younger cohorts.
Amid rising life expectancy across Asia, the report explored the need to enhance financial resilience during working years, potentially allowing individuals to save more for retirement. Longevity trends are placing pressure on traditional family support systems, healthcare, and financial stability, especially as changing family structures leave many older adults without the multigenerational support that was once common.
Calvin Chiu, Head of Asia Retirement, Manulife Investment Management said, “With life expectancy rising throughout the region, it’s imperative that consumers begin planning earlier and more comprehensively. The report sheds light on how individuals in different markets can build financial resilience and prepare for a secure future. The retirement industry, along with governments and employers, play a critical role in supporting an aging population and helping consumers save and invest for their extra years of longevity.”
Financial Resilience Varies Across Asia
The report revealed that financial resilience is essential to navigating common obstacles such as debt, healthcare costs, and emergencies. Consumers across Asia recognized the importance of saving for retirement, yet many struggle to balance short-term financial needs with long-term goals.
On average only 39% of people across all age groups feel good about their finances today, but an average of 52% of respondents feel the situation could improve in 10 years’ time. However, top concerns that may affect their ability to build financial resilience include lack of or insufficient savings, unexpected medical expenses, and lack of or reduced income.
Other key findings in the Asia region include:
● Rising healthcare costs, inflation, and economic slowdown are top concerns, with over 70% of consumers in Japan and Singapore concerned with these external factors affecting their ability to build financial resilience.
● Most people in Asia rely on cash savings and bank deposits (63% - 71%), more than other financial products, to achieve their financial goals.
● Nearly two-thirds of consumers in Asia feel children are great investments who will provide for them as they get older. This causes concern for those who do not have family to care for them as they age, especially those closest to retirement.
Retirement Delays and Family Responsibilities
Similar to global trends, consumers in Asia expect to delay their retirement, especially as they continue to support both children and aging parents. Changing family dynamics in Asia, including declining birth rates and fewer multigenerational households, have added pressure to their financial planning.
Across all age groups, an average of 62% of people in Asia are afraid they will need to postpone their retirement because of financial responsibility for their family.
That said though, an average of 57% respondents who don’t plan to marry or have children are concerned about growing old without a spouse or children to look after their financial and well-being needs. To fill the potential financial gap, an average of 75% of people said they will save as much money as possible, and only 28% said they will invest in different financial products.
Digital Engagement and Financial Planning
Consumers in Asia are increasingly interested in digital solutions and financial planning tools to help them manage their finances. Engagement with digital platforms correlates strongly with better financial outcomes, with those who frequently check their retirement plan or engage with financial content online more likely to report being in good financial shape.
“Technology is playing a critical role in helping consumers in Asia better understand and manage their financial futures. For example, in Hong Kong Manulife has piloted a robo-advisory service to Mandatory Provident Fund (MPF) members. This service is designed to help them better understand their retirement investment and risk profiles, and make more informed decisions about their MPF choices,” said Chiu. “By leveraging personalized tools and data-driven insights, we aim to empower individuals to feel more secure about their financial lives, in partnership with plan sponsors, advisors, and third-party administrators.”
Financial Priorities and Passive Income Approaches in Asia
While pension schemes provide some level of financial support in retirement, people need to consider the longevity and inflation factors to assess whether their pensions could last their lifetime. A way to create a better safety net is through investments that could generate a steady stream of income even in retirement. For example, they can consider retaining their pension accounts after reaching retirement age and continue investing in the scheme.
For markets that have pension schemes:
● 35% in Hong Kong expect to rely on the Mandatory Provident Fund (MPF).
● 52% in Singapore expect to rely on the Central Provident Fund (CPF), a mandatory program.
● 36% in Indonesia expect to rely on the Financial Institution Pension Funds (DPLK), a voluntary program.
Some pension scheme providers offer income funds that regularly distribute dividends, allowing investors to receive an income every month while remaining invested in dividend-paying funds. There are also retail funds offering monthly distributions, where investors can gradually invest in suitable income funds before retirement based on their individual needs and risk tolerance. For instance, Manulife Investment Management and Trust Corporation has four unit investment funds (UITFs) that provide monthly income distributions through investments in portfolios of real estate investment trusts, preferred securities, Asia bonds and other global asset classes. The UITFs can be accessed for as little as Php1,000 through Manulife iFUNDS, a secure and easy-to-use digital investment platform.
Methodology
The Asia findings of the Manulife Financial Resilience and Longevity Report was from the Manulife Asia Care Survey 2024 that was conducted in January and February 2024 via online self-completed questionnaires in eight markets, including Mainland China, Hong Kong, Japan, Singapore, Malaysia, Indonesia, Philippines, and Vietnam. A total of 8,400 people, evenly split between men and women, aged 25 to 60 years old were surveyed. The 2024 Financial Resilience and Longevity Report for Asia is available online.
