Half of Malaysians not financially ready for retirement
Azaddin Ngah Tasir

This is due to poor financial savings and lack of prudence spending, according to AKPK

By SHAHEERA AZNAM SHAH / Pic By ISMAIL CHE RUS

Half of Malaysians are not ready for retirement due to poor financial savings and lack of prudence spending, said Credit Counselling and Debt Management Agency (AKPK).

“According to a survey we conducted in August, 55% of the 1,000 Malaysian respondents may not be ready for retirement,” CEO Azaddin Ngah Tasir said, referring to the latest AKPK and Visa Malaysia’s financial literacy study.

“Almost half of the respondents who are having financial problems associate the situation to poor financial planning,” he said at the launch of the Financial Insight mobile application in Kuala Lumpur yesterday.

Azaddin also said digital convenience through online purchasing may pose a threat to people’s purchasing habits.

“With the e-commerce industry having grown progressively, it is easier to get lost in the convenience. The ease of online transaction and payment may affect people’s spend- ing habits, and will likely expose themselves to frauds and scams.

“Thus, financial education is crucial to ensure that smart purchases and sound decisions are being made online to avoid losses,” Azaddin said.

Commenting on the government’s decision to revise the salary limit in public servant housing loans, Azaddin said such concern will alleviate if debtors have sound financial skills.

“The decision is definitely to promote home ownership and give flexibility in loans approval, but it will create some risk of higher debt if debtors don’t have a proper payment plan.

“By the end of the day, it all comes back to the judgement of personal spending to evaluate whether they can afford such flexibility,” he said.

On the newly launched Financial Insight application, Azaddin said the digital platform has been an effective tool to disseminate financial education — particularly to the young generation, as they are comfortable in using mobiles as a tool of reference.

“Official statistics from the government revealed that mobile banking penetration is at a rate of 31.7% from the total population, and it has shown an exponential increase from 2005.

“Considering the rising interest in digital means, we believe that the development of mobile applications in the financial sector will be able to help people, particularly the young generation, to possess better financial literacy,” he said.

A collaborative effort with Visa Malaysia, Azaddin said the application is intended to gain interest in retirement investments and provide necessary skills to effectively manage financial resources.

“It is common for people below the age of 30 to overlook the importance of retirement savings. Also, the Employees Provident Fund revealed that two-thirds of its members aged 54 have less than RM50,000.

“It is also estimated that only one out of 10 Malaysians can survive more than six months in a case of losing their income. This worrying situation can be reduced if Malaysians take an early action in savings,” he said.