Despite the multifarious challenges facing the global economy, people generally feel good about their finances, health and work as compared to the previous year. However, factors such as cost of living and inflation are still causing stress, and underspending is slightly surpassing overspending, a new report finds.
More than half of the global working population is optimistic about the near future, with net optimism increasing by 15% across the globe, according to Fidelity International’s Global Sentiment Survey 2023. Asia is generally more optimistic than Europe.
The annual survey, conducted with more than 25,000 respondents across 23 markets including mainland China, Hong Kong, Singapore, Japan, India, South Korea and Australia, aims to analyze the sentiment of working adults towards their finances, health, work and life.
Mainland China and Singapore were the most positive about the near future, with 84% and 75% of respondents respectively stating they feel optimistic about the next six months. Japan is the most negative about the near future, with 38% sharing they feel pessimistic.
Mainland China and India generally feel good about their day-to-day finances and savings. By contrast, Hong Kong and Singapore feel worse. Only 46% of people in Hong Kong and 43% of people in Singapore feel good about their day-to-day finances.
Maintaining current lifestyle/income (96%), being financially comfortable in retirement (95%) and preparing for later life (92%) are the most common financial goals of respondents around the world. These long-term financial goals were also the most common in 2022.
Interestingly, 82% in Singapore have buying a property as a long-term financial goal, significantly above the global average of 67%. In Hong Kong, 76% have finding a new job as a goal, which is also above the global average of 65%.
Globally, a third (34%) say that they have overspent in the last six months, while 40% have underspent. In Asia, mainland China (52%), Singapore (44%) and Hong Kong (40%) have the highest number of respondents stating they have spent less than they can afford. However, Singapore and Hong Kong were also among the highest in the region when it came to spending more than they can afford, highlighting a wide gap in behaviour among the population.
As cost-of-living and inflation spiked around the world, Europeans were among the least likely to have increased how much they save, while some Asians were among the most likely. Respondents in India (49%) and Hong Kong (33%) were among the highest percentage in the region to have increased their savings. In contrast, Singapore and Australia were the most likely to have decreased their savings. Spending more on household expenses remains the main reason for saving less, reflecting the inflationary pressures being experienced in many markets.
Across the region, more people increased their retirement savings contributions than not, highlighting the importance of retirement planning in the region. This was especially apparent in India, Singapore and mainland China. Workers aged 50 and over in Asia are unlikely to have changed when they plan to retire. Those who have, typically expect to retire later. Hong Kong and Singapore stand out as the exceptions, with more respondents expecting to retire earlier than later.
Lack of funds is the key reason why people expect to retire later, while enjoying work continues to be a distant second. Affordability is still the main reason why people plan to retire earlier, though caring for a family member and the struggle to find new employment post-redundancy was particularly apparent across Asia.
“Despite the challenges faced by many global economies, people are feeling more optimistic about the future,” says Johann Santer, head of private banking and regional lead for wholesale and wealth at Fidelity International. “As cost-of-living continues to rise, people are noticing the importance of increasing their savings through investments. The best way to future-proof your savings and achieve your lifestyle and retirement goals is through consistent investment. And financial institutions have a part to play by staying close to the evolving needs of investors and providing timely education and engagement.”