Young Malaysians struggle to build financial resilience

KUALA LUMPUR: More needs to be done to improve financial literacy among young Malaysians, said Prudential Malaysia Assurance Bhd (PAMB).

This includes greater awareness of riskier financial instruments. Additionally, more communication is needed about the benefits of protecting incomes and health to instil stability in later life.

PAMB chief executive officer Lim Eng Seong said he believes that these steps will help address the issues young Malaysians face regarding their future financial stability.

“Financial empowerment needs to start at a young age and include continuous learning that evolves alongside the individual’s growth and stage in life,” he said in a statement today.

For PAMB, Lim said that their corporate responsibility programmes are working toward this agenda.

“This includes our financial education programmes, Cha-Ching, Duit Right, and Adult Financial Education (AFE), catering to different life stages, from as young as seven to adulthood.

“We also have PRUKasih Aman, a micro-insurance solution for the low-income community to help them attain the benefits and protection that come with an insurance plan,” he added.

PAMB today released ‘Fulfilling Futures – Seeking Future Financial Security: The challenges facing young Malaysians,’ a report written by Economist Impact, which looked at how Malaysians across different age groups are saving for their future and the challenges faced by young Malaysians in becoming financially resilient.

The report shows that concerns about personal finances are strongest among the youngest cohort of Malaysians (aged between 25 and 34).

These are mainly young adults who may be in the early stages of their careers. However, they face challenges that limit their ability to save and invest in the future, including low wage growth, an increase in the cost of living, changes in the employment landscape, and limited financial literacy.

As Malaysia’s population starts to age, financial security in retirement is a cause for concern. Less than half of Malaysians (48 per cent) profess satisfaction with their financial well-being, the second lowest among the markets surveyed.

While more than half (57 per cent) are confident of saving enough to support living to age 80 and beyond, this is the lowest figure registered.

The survey found that younger Malaysians are more likely to hold multiple jobs to make ends meet, with 38 per cent in the 25 to 34-year age group stating they have worked more than one job compared to 26 per cent of those aged between 35 to 44.

In terms of savings, the report found that only a quarter (25 per cent) of those in the 25 to 34 age group contributed to retirement funds such as the Employees’ Provident Fund (EPF), whereas 40 per cent of Malaysians in the 45 to 55 age group did so. – BK