Impact of Rising Living Costs on Financial Resilience in Singapore
Sun Life Singapore has recently unveiled findings from the third Financial Resilience Index by Sun Life Asia, revealing that escalating living expenses are significantly affecting financial stability across Singaporean households. The study indicates a steep decline in high financial resilience from 34% in 2025 to just 21% this year, with low resilience rates climbing from 9% to 20%. Alarmingly, only 11% of those surveyed feel very financially secure, a sharp drop from 22% the previous year.
This financial strain spans all income groups, including High-Net-Worth (HNW) households earning SGD250,000 or more annually. Notably, 76% of these households report increased difficulty in managing monthly expenses due to inflation, with 59% anticipating necessary lifestyle adjustments should costs continue escalating. While these individuals typically display higher financial confidence at 67%, the sustained rise in living costs remains a considerable risk factor.
Impact of Rising Costs on Essential Expenses
The survey highlights essential expenses as a primary pressure point, with 95% of respondents impacted by grocery costs, followed by utilities (94%), healthcare (89%), cooking fuel (86%), and transport fuel (84%). The most frequently cited cost increases over the past six months were groceries and food (80%), utilities (58%), and transport and fuel (55%).
About 52% view the cost of living as the principal barrier to effective financial management, making everyday expense management a top priority for 55% of respondents in the coming year. This priority now surpasses traditional financial goals such as retirement saving (44%) and emergency fund building (37%).
Strategies and Financial Planning Amid Rising Costs
Christopher Albrecht, CEO of Sun Life Singapore, underscores the urgent need for strategic savings and financial planning as living costs rise. He notes that while affluent consumers may be better equipped to handle financial disruptions, financial resilience isn't solely linked to income levels. The research shows households making short-term financial concessions that might diminish long-term resilience, with more than half (54%) cutting non-essential spending, drawing on savings (24%), reducing or foregoing essential spending (24%), and pausing retirement contributions (14%).
Financial literacy emerges as crucial, with 70% of participants rating their knowledge as basic or lower. Better-informed individuals tend to be more optimistic about their financial status and prospects. The increased reliance on Generative AI (GenAI) for financial decision-making is notable, with 53% using it for advice and 55% expecting its usage to grow. This trend is even more pronounced among HNW families, with 74% regular usage and 69% anticipating further adoption.
Despite GenAI's usefulness for initial financial research, Albrecht stresses the importance of personalized financial advice, particularly for addressing complex planning needs within affluent households. The comprehensive index report and detailed findings for Singapore’s HNW segment are available for further review.