Sun Life Asia Financial Resilience Index reveals millennials are the most financially resilient generation, but a lack of planning limits resilience for all

March 13, 2024 adhigo

Sun Life Asia Financial Resilience Index shows millennials lead the race in financial resilience, based on level of financial literacy, understanding of tools, and ability to manage finances
Confidence across all generations is high, but 60% have no financial plan beyond one year
One in three (34%) doesn’t have or can’t keep to a budget, and one in four respondents (25%) feels financially insecure
Only one in 10 respondents (10%) is highly resilient and on track to achieve future goals and withstand future shocks

HONG KONG, March 13, 2024 /PRNewswire/ — Sun Life Asia released its inaugural “Sun Life Asia Financial Resilience Index” today, which examines the financial behaviours and beliefs of individuals across the region, and the barriers they face to building long-term financial security. The Index revealed that while confidence and optimism are high, many people still lack a plan of action.

The study found confidence outstrips preparedness when it comes to long-term financial goals, with 69% of respondents confident in meeting their long-term financial goals yet only 40% with a financial plan beyond one year. Retirement and savings were listed as the second highest financial priority by respondents, after managing day-to-day expenses, but only 16% currently have a retirement or pension plan to support their goals.

Millennials the most resilient generation

Millennials were shown to be the most financially resilient generation in Asia. Compared with other generations, they are more optimistic (75%) about their financial futures. They are also the most confident in being able to meet their long-term goals (70%) compared to older generations (63%). Millennials also claim to be more financially literate (80%) compared to their older peers (70%) and are the most likely to make research-based decisions (56% compared to 51%). That said, only 42% of millennial respondents have a financial plan beyond one year ahead, which means they risk falling into the same planning trap as other generations.

David Broom, Sun Life Chief Client and Distribution Officer, Asia said: “The Sun Life Asia Financial Resilience Index provides a window into how households across Asia are approaching their financial goals and protecting their future. It’s wonderful that so many people feel more optimistic about their finances in 2024, and this optimism deserves a plan to make it a reality. A financial plan provides simple, clear steps towards achieving your wealth and health goals.”

The rural vs urban divide

The report also found a stark rural-urban divide, with people living in cities (58%) having a greater sense of financial security than those in rural areas (51%).

Emotion and trust play a key role in financial decision making

Nearly half of respondents (46%) reported that emotion and trust played a key role for them in making financial decisions. Financial institutions were the most trusted sources of financial information, followed by family and friends, and then independent financial advisors. Social media was ranked the least trusted source of financial information. Close to half (47%) would like to educate themselves more about personal finance, yet they may be reluctant to ask for help as only (23%) currently get professional help or advice in managing their finances.

Being wealthy does not automatically mean being financially resilient

The survey found that even among the wealthiest respondents, many lack preparedness and under-estimate their expenditure levels or the benefits of a long-term financial plan. Lower and high-income respondents are just as likely to exceed their monthly budgets (21% for both). The study also found that only 45% of high-income respondents are planning beyond a one-year horizon, only marginally higher than the average of 40% across all income bands.

“Financial resilience is a goal for people of all ages and incomes, and it starts with small actions like setting a budget and building a plan so you can save and invest toward your goals. Sun Life offers a number of free digital tools to help people plan, prioritise and track their financial goals. A financial plan, combined with holistic financial advice can identify the best solutions for your needs and put you on a path to grow and protect your wealth and financial security,” Broom commented.

The Sun Life Asia Financial Resilience Index was a study conducted in October 2023 to benchmark financial resilience against the five key pillars of confidence, behaviour, planning, tools and resources. It is based on a double blind survey of 8,000 people in eight markets (China, Hong Kong SAR, India, Indonesia, Malaysia, Singapore, the Philippines and Vietnam).

The full report is available here.

About Sun Life

Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong SAR, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of December 31, 2023, Sun Life had total assets under management of $1.40 trillion. For more information, please visit www.sunlife.com.