A significant portion of Singaporeans are willing to take on high-interest loans to invest in the stock market, despite limited financial literacy, a new survey has revealed. According to the study by MDRT, nearly a quarter of respondents, or 23%, consider taking a loan with a 10% interest rate to invest, with the highest risk appetite seen among younger generations.
While only 49% of those surveyed rate their financial literacy as “good” or “excellent,” younger Singaporeans, particularly those in Generation Z (29%) and millennials (31%), are more inclined to take on investment risks compared to just 16% of Gen X and 7% of baby boomers.
The survey, which polled 2,000 Singaporean adults, highlights a significant gap between financial awareness and practical application. While 81% of respondents are aware of traditional financial tools like savings accounts, the actual use of more strategic financial products remains limited. Just 49% of participants use fixed deposits, 42% use high-yield savings accounts, and only 29% engage with endowment plans.
Investment behavior mirrors this trend. While 77% of respondents hold some type of investment account, more sophisticated tools, such as long-term bonds (33%) and the Supplementary Retirement Scheme (31%), are less commonly utilized. Younger generations are more likely to engage with higher-risk investments, including cryptocurrencies and alternative assets like art and wine.
Insurance coverage also shows a similar pattern. While most Singaporeans are aware of basic insurance types, fewer actually have coverage. Just 65% of respondents have hospitalization insurance, and less than 60% have critical illness or life insurance. Pet insurance remains especially underused, with only 14% of respondents holding a policy, despite 81% awareness.
Notably, only 37% of Singaporeans work with financial advisors. However, those who do tend to have more diversified portfolios and better insurance coverage.
Financial professionals emphasize the need for proper financial guidance, particularly for younger individuals facing pressures from rising housing costs, family responsibilities, and overall living expenses.
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