Expats living in Singapore, recently named the world’s most expensive city, are putting less money into savings as more of their resources goes into keeping up with rising costs.

Expats living in Singapore, recently named the world’s most expensive city, are putting less money into savings as more of their resources goes into keeping up with rising costs, a survey finds.

Rising costs of living appear to be outpacing expat salary growth in Singapore, Standard Life, the UK-listed financial services group, says in its survey, with half the respondents saying that they do not feel their salary matches the cost of living in Singapore, even though 80 per cent earn more and 70 per cent save more than they did before moving to the jurisdiction.

The survey comes out, however, at a time when some recent data from the Urban Redevelopment Authority has shown that in the third quarter, private residential prices fell in the third quarter of this year, the fourth consecutive drop. Authorities in Singapore have sought to curb excessive leverage exposure to the housing market and to cool what have been high prices.

Nearly half of this year’s respondents set aside less than 10 per cent of monthly income towards long term savings such as for retirement planning. Compared with findings from Standard Life’s inaugural expatriate survey last year, this means there is close to a 10 per cent year-on-year drop in the number of respondents who make an effort to save regularly with only 54 per cent of this year’s respondents falling into this category against last year’s 62 per cent.

Lifestyle is still the main savings priority for most people surveyed.  Showing a 10 per cent increase on last year, this year 88 per cent of expatriates surveyed put 20 per cent of their monthly income towards holidays and 20 per cent of monthly income towards short term savings for lifestyle.  This demonstrates how the anxiety expressed by nearly 50 per cent of respondents regarding their long-term financial situation surprisingly does not appear to translate into direct action.

“At first glance, the results of our survey have revealed to us an interesting dichotomy for expat savers in Singapore. A greater number of savers are earning and saving more in Singapore than they did before coming here, but the increase in earning power and disposable income coupled with greater saving potential have unexpectedly been offset by rising costs of living,” Neal Armstrong, CEO and Principal Officer, Standard Life Singapore, said.

Continuing a trend seen in last year’s survey findings, those who do save more, place retirement and property purchase above family commitments. More than 50 per cent of respondents prioritise savings for pension/retirement and property over children’s education or marriage/starting a family.

Those who do prioritise saving for family commitments over retirement are nervous about their retirement financial situation. Some 47 per cent of respondents feel nervous about their retirement financial situation as they have not saved up to a desired level, have not set up a proper retirement plan and find it hard to save due to other commitments such as raising a family.