A new report from Allianz has revealed that Singapore residents hold more financial assets than most of their peers around the globe, securing the city-state’s position as one of the world’s wealth leaders.
According to the Allianz Global Wealth Report 2024, Singapore ranks fourth globally, with net financial assets per capita at a staggering €171,930 (S$246,000).
This figure places Singaporeans well ahead of other high-performing nations in the region, as they continue to build their wealth through a diverse range of financial assets such as cash, stocks, and bank deposits, based on data from the end of 2023.
Globally, the United States leads the pack with €260,320 in net financial assets per capita, followed closely by Switzerland at €255,440.
Denmark just edged Singapore out of the top three with €172,200, meaning Singaporeans are right on the heels of the world’s wealthiest countries.
Leading the wealth race in Asia
When it comes to Asia, Singapore stands head and shoulders above the rest. The report confirmed that Singapore has the highest gross financial assets per capita among all Asian countries.
Taiwan follows behind, ranking fifth globally with €148,750, while Japan sits in 12th place at €91,940.
Singapore’s success is fuelled by strong income growth for private households, as the country’s gross financial assets surged by 5.8% in 2023.
This is almost double the growth seen in 2022, pointing to the robust economic momentum of the city-state.
Stocks and savings are key
What’s driving this financial growth? The report shows that the main drivers were securities and bank deposits, which saw substantial gains.
Singaporeans are continuing to invest in stocks and keep savings in the bank, contributing to the nation’s overall wealth growth. However, insurance and pension assets lagged slightly behind in terms of growth.
While life insurance and pension assets grew in 2023, Allianz noted that the increase was still below the long-term average.
This may signal that Singaporeans are cautious about long-term investments, or it could reflect broader economic trends, like rising interest rates.
Debt is in check, but inflation bites
One standout element of the report is Singapore’s impressive control over household debt.
Despite the global economic pressures, liabilities in Singapore only grew by 1% in 2023. The debt ratio—a key indicator of financial health—dropped to 54.1%, down by a massive 20 percentage points compared to a decade ago, The Strait Times reported.
This shows that Singaporean households are not only increasing their financial assets but also becoming more prudent with their borrowing.
While financial assets grew nominally, when factoring in inflation, the real growth rate was just 0.9% in 2023. This is still higher than pre-pandemic levels but lower than the rapid growth seen in 2021.
Inflation continues to nibble away at the real value of assets, making it a constant challenge for savers and investors.
What’s next for Singapore’s financial future?
Looking ahead, Allianz predicts that insurance and pensions will remain central to Singapore’s financial landscape.
These asset classes already make up nearly half of residents’ financial wealth, and their importance will only grow with the ageing population.
As Singaporeans focus more on long-term financial planning, insurance and pension products will play an even bigger role in securing future wealth.
With a rapidly ageing population, preparing for retirement will likely become an even more significant priority.
Despite inflationary pressures and modest real growth in 2023, Singapore’s financial outlook remains strong.
The city-state continues to lead the region in wealth accumulation, with cautious borrowing habits and a robust portfolio of financial assets. If the current trends continue, Singapore is well-positioned to maintain its place as one of the wealthiest nations in the world.
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