People walk past a transparent poster advertising an exhibition, in Central market on June 2, 2022. Hongkongers are facing a higher cost-of-living in many areas including higher electricity bills starting in January. Photo: Felix Wong
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https://scmp.com/business/article/3204006/hongkongers-save-money-highest-rate-5-years-still-feel-insecure-fearing-emergency-needs-amid Business
Hongkongers save money at highest rate in 5 years but still feel insecure, fearing ‘emergency needs’ amid economic gloom
- Average monthly savings jumped 17 per cent to HK$7,700 compared with last year, a survey from the Hong Kong Deposit Protection Board finds
- The total savings Hongkongers say they need to feel secure jumped 20 per cent to HK$590,000
People queue at a tram station in Hong Kong’s Central district on December 13, 2022. Photo: Sam Tsang
Hongkongers prioritised savings in 2022, with the average amount squirrelled away each month reaching a five-year high amid fear of “emergency needs” amid prolonged pandemic conditions and economic uncertainty, according to an annual survey.
Average monthly savings increased 17 per cent to HK$7,700 (US$989) from HK$6,600 last year, according to the survey by the Hong Kong Deposit Protection Board (HKDPB), released on Tuesday.
Meanwhile, the amount of savings respondents believe they need to provide a sufficient sense of security jumped 20 per cent to HK$590,000 from HK$491,000 a year ago.
The telephone survey, in its fifth year, polled a total of 1,005 Hongkongers aged 18 and above between August 3 and September 22. It was carried out by the Hong Kong Institute of Asia-Pacific Studies.
Factors such as the provision of government consumption vouchers, and a decline in overseas travel and entertainment expenses, may have contributed to the increase in average monthly savings, HKDPB said.
The city’s residents are feeling less secure about their savings than they have in the past five years, rating their sense of security at 51.4 on a 100-point scale, according to the survey. That is down from 53.2 last year and a peak of 56.1 in 2019, and almost 30 per cent of respondents gave marks lower than 50.
“The survey results show the increase in crisis awareness and the need for security among people in Hong Kong due to the impact of the Covid-19 pandemic and the economic downturn,” said Connie Lau Yin-hing, chairman of the Hong Kong Deposit Protection Board.
More than 80 per cent of respondents rely on bank deposits for their savings, an increase of almost 10 percentage points from previous years. In contrast, savings through stocks, bonds and funds, as well as savings via insurance, both dropped, by 28 per cent and 21 per cent, respectively.
Some 70 per cent of Hongkongers made a regular habit of saving, an increase of 5 per cent over last year and the highest percentage since the Covid-19 pandemic began in 2020. Among the regular savers, nearly 60 per cent cited “emergency needs” as their primary motivation, a 50 per cent jump over last year.
Hong Kong is facing rising inflation on many fronts. The city’s two electricity providers, CLP Power and HK Electric, recently announced that their customers will see their bills increase by 6.4 per cent and 5.5 per cent, respectively, starting in January because of fuel-price volatility caused by geopolitical tensions.
The city’s overall consumer price index (CPI) – a measure of changes in the cost of goods and services bought by households – rose by 1.8 per cent in October year on year.
“In view of the interest-rate upcycle and increase in deposit interest rate, we do not rule out that there will be more people shifting from investing to saving as the interest rate continues to go up,” Lau added.
The survey also included in-depth interviews with 301 Hong Kong residents aged between 18 and 29. Despite a relatively high unemployment rate among the younger generations, 60 per cent of respondents have a saving habit, with an average monthly savings of HK$5,000.
However, this is down nearly 10 per cent from last year’s HK$5,600. Among these regular savers, one-third set a saving goal this year, which is the highest among all age groups, indicating a positive attitude towards saving among young people, according to the HKDPB.
In November, Hong Kong downgraded its full-year economic forecast from between 0.5 per cent growth and 0.5 per cent contraction to a 3.2 per cent drop amid an ongoing recession, citing a deteriorating external environment and the Covid-19 pandemic.
The Hong Kong Deposit Protection Board is an independent statutory body formed under the Deposit Protection Scheme Ordinance. It oversees the operation of the scheme, which protects Hongkongers’ bank deposits.