Goals lowered as savings fall 7pc to $7,000 a month

Business | Kevin Xu 23 Oct 2020

Hongkongers are coming to terms with the prospect of smaller nest eggs, with average savings falling 7 percent to around HK$7,000 a month.

The average savings needed by residents for a sufficient "sense of security" fell 35.7 percent to HK$502,000 this year from HK$781,000 last year, according to a survey by the Hong Kong Deposit Protection Board.

The findings may imply that under the pandemic and subsequent economic downturn, people find it easier to achieve satisfaction with less cash in the bank, as their saving ability may have declined, the HKDPB said.

The survey involved 1,000 Hong Kong residents aged 18 or above from August 24 to September 20.

About 67 percent have a habit of saving, which is consistent with last year's results. However, average monthly savings was HK$7,000, down by about 7 percent from last year. The median monthly savings remained at HK$5,000.

Nearly 40 percent of respondents said they have set a savings target this year, which is 6 percentage points higher than last year. Among those who have a target, 70 percent are confident in meeting it.

The current economic instability has prompted residents to adjust their monthly savings, which has in fact awakened their awareness about the importance of saving money, HKDPB said.

Having deposits with banks remain the most common form of savings for Hongkongers among different age groups, with a penetration of 72 percent.

In terms of Hongkongers' "sense of security" about their savings, more than 75 percent of the respondents achieved 50 marks or above though the overall average rating has fallen slightly from 56.1 in 2019 to 54.8 this year.

The survey also interviewed parents with at least one child aged 10 or below to understand how they save for their children. It revealed that 76 percent of them have regular saving habits and save HK$8,600 a month on average. Nearly half of them claimed they saved more, with a target amount of around HK$1 million for each child, mainly for education purposes. Among the parents who set aside extra savings for their children, 61 percent of them encourage their children to develop saving habits.

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