Youth more inclined to save, shows poll

Consumers in the Asia-Pacific, Middle East and Africa regions were more predisposed to save up for a rainy day with the proportion of younger consumers below the age of 30 saving more than older consumers, according to a recent MasterCard survey.

Seventy-seven percent of consumers below 30 plan to save either the same or more in the next six months, compared to those between 31 to 45 years (73 percent), 46 to 55 years (72 percent) and those aged 56 years and above (71 percent).

In eight of the 21 markets across the region, a majority of consumers are looking to save more in the coming six months.

Topping the list of savers is Vietnam, with 52 percent of consumers intending to save more over the next six months. This is followed by India (47 percent), United Arab Emirates (47 percent), South Africa (47 percent), New Zealand (46 percent), the Philippines (45 percent), Qatar (44 percent) and Australia (43 percent).

In the Philippines, the economic uncertainty has prompted 83 percent of Filipinos to become financially forward-looking. They see the need to maintain or increase their level of savings in preparation for unforeseen emergency expenditures.

The majority of Filipino consumers (47 percent) intend to set aside at least one to 10 percent of their income in the next six months.

Among the different age groups, those in the 18 to 30 age bracket (89 percent) are most concerned about saving for a rainy days compared to their older counterparts — 31 to 45 years (42 percent), 46 to 55 years (41 percent) and 56 years and above (37 percent).

Moreover, the survey showed that more female consumers (48 percent) plan to save up in the next six months than male consumers (43 percent).

Filipino consumers are also saving for investments (60 percent), retirement (57 percent) and consumer electronics (38 percent).

At the other end of the spectrum, Egypt has the highest percentage of consumers planning to save less at 63 percent. In Egypt and Taiwan (39 percent), the majority of the consumers are looking to save less. The majority of consumers in the rest of the markets intend to maintain their level of savings.

Uncertainty over the economy and hence the need to be prepared for unforeseen emergency expenditures (71 percent) is the top reason cited by consumers who are planning to maintain or increase their level of saving in the next six months. Thailand (95 percent) had the highest proportion of consumers concerned about the economic uncertainty, compared to China (48 percent) with the lowest proportion among markets in the region.

“Saving levels are a leading indicator of consumers’ future spending patterns. A lot of households save so that they can spend later on the purchase of large ticket items. From this perspective, such savings are merely indicators of future consumption. Precautionary savings are, however, qualitatively different. They represent a net subtraction of total spending because funds are put aside and untouched when people worry about the future. Therefore, precautionary savings affect consumer spending in ways that other forms of savings don’t.  –Daily Tribune