Malaysians on the brink of financial disaster, RinggitPlus survey confirms

MALAYSIANS are in their worst-ever financial position to prepare for recession and continued inflation in 2023.

Data from the RinggitPlus Malaysian Financial Literacy Survey (RMFLS) 2022 revealed several painful truths about the rakyat’s current financial state, including depleted savings, cash flow issues, and other concerning trends.

70% of the 3,144 respondents polled indicated that they save less than RM500/month or do not manage to save at all. This is the worst-ever result tracked by the RMFLS in five years.

On the contrary, the amount of Malaysians who manage to save more than RM1,500/month has dropped significantly. From 20% in 2020, the figure dropped four times lower to just 5% in 2022.

RMFLS 2022 results indicated that more Malaysians are struggling with less savings in hand, as 63% of respondents stated that they can survive for three months or less with only their savings.

A similar pattern is also seen where 55% of Malaysians spent exactly or more than what they earned each month (44% last year), essentially living paycheque-to-paycheque.

With depleted savings and rising commodity prices, the survey also revealed a concerning trend in which fewer credit cardholders are paying off their bills in full – only 55% in 2022 compared to 70% last year.

Short-term relief

A staggering 66% of respondents above 21-year-old stated that they will consider applying for more Employees’ Provident Fund (EPF) withdrawals if the Government allows it.

The survey also found that 52% of Malaysians above the age of 18 have not started investing.

The majority of investors, however, have medium-term investment objectives which is not ideal though may be influenced by current financial struggles and global economic outlooks.

Wake up call

Hann Liew

“The financial effects of the pandemic have been devastating and our survey findings this year reaffirm that Malaysians have real financial challenges to address”

It is a harsh reality 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 concerted support from all parties. We cannot leave anyone behind,” said RinggitPlus co-founder and director Hann Liew.

Furthermore, RinggitPlus recently introduced a new section to its savings vertical on that highlights the various cash management solutions in the market as it aims to encourage Malaysians to save and earn best-in-class returns.

In addition, RinggitPlus will begin offering its content in Bahasa Malaysia in 2023. – Dec 7, 2022


Main photo credit: Corporate Finance Institute

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