Millennials’ financial needs are under-documented and they are Singapore’s new ‘sandwich generation’
Etiqa Insurance Singapore’s 2021 Protection Survey Report, identifies millennials as Singapore’s new ‘sandwich generation’.
Millennials’ financial needs when purchasing life insurance considered
The underlying survey was conducted in July this year, gathering responses from 815 individuals aged 25 to 40. The study aimed to shed light on millennials’ financial commitments and considerations when purchasing life insurance. This resulting report coincides with the first launches of protection products, to be progressively rolled out over the next 6 months.
With the youngest millennials now members of the workforce, the need for protection is more pressing than ever. Mounting commitments in domestic and professional spheres place millennials under growing financial and emotional pressure to fulfil their duties to family and work. The pandemic has made it even more difficult to plan for the future – a position that older generations may not understand.
Millennials’ financial needs and concerns centers around care and retirement
Among the foremost sources of financial concern listed by respondents were providing for their ageing parents financially (48%) and funding their own retirement (60%). Both worries could be linked to the rising costs of living and life expectancy here.
In just a decade from 2010 to 2020, local life expectancy increased from 81.54 to 83.90 years. As this figure rises, so lengthens the time millennials need to support their parents and eventually themselves in old age.
As is symptomatic of hectic modern life, national statistics demonstrate that millennials are putting off getting married and having children to a later age than their predecessors. As millennials juggle responsibilities to younger children and ageing parents, the insurer’s challenge lies in providing competitive life insurance and critical illness coverage tailored to millennials’ emergent needs.
With regard to caring for ageing parents, 4 in 5 worried about affording their healthcare expenses (82%), and 3 in 5 worried about caregiving costs (60%). Few older parents may recognise the risk of outliving their savings, or be willing to augment protection in old age due to high cost. Millennials can nonetheless ensure that their parents will have the funds they need, mishap or otherwise, by purchasing sufficient life insurance coverage for themselves.
Millennials’ financial needs are at odds with their reputation
Meanwhile, the annual medical inflation rate of 10% provides little comfort to those already struggling to manage their finances. Accordingly, 1 in 2 millennials consider their own healthcare expenses (54%) a major source of financial worry, with almost as many concerned about losing their ability to work due to critical illness (45%) and subsequently losing their income.
The Protection Survey results reveal a picture of millennials at odds with their reputation, perceived by their older counterparts as ill-disciplined, entitled and overly materialistic. Instead, millennials personify a generation under increasing pressure in all aspects of life.
Millennials’ financial needs are under-documented
Shirley Tan, Etiqa’s Chief Marketing Officer, shares, “Our findings show that millennials are unfortunately still misunderstood in Singapore, and their financial needs still under-documented. In order to move with the times, financial institutions must begin by recognising each generation’s unique and diverse needs and structure financial planning solutions to meet them.
“We believe that the results of our Protection Survey better position us to provide such solutions for our millennial customers, such as through our recent and upcoming protection launches. We look forward to introducing more innovative plans in the near future to cater to millennial lifestyles.”
Another survey done earlier this year showed that Millennials utilise advanced skills when searching for their needs. For example, Millennial home shoppers are taking advantage of virtual home search techniques
- Fifty-nine percent of millennials reported COVID has changed the way they are approaching their home search. Of those respondents:
- Thirty-seven percent are spending more time researching properties online.
- Thirty-five percent are spending more time looking at listings photos.
- Thirty-two percent are spending more time watching listing videos.
- Thirty-one percent are being more selective about the homes they decide to tour.
- Twenty-seven percent are driving by the home to check out the neighborhood.
Millennial home shoppers are ready for some competition
- Seventy-one percent of millennial respondents expect some or a lot of competition in the market when shopping for a home.
- Luckily, 68% reported that shelter in place orders helped them save for their down payment.
- With home prices quickly rising, 45% expect to receive financial assistance from family or friends.
Millennial home shoppers are tired of their homes and they want room to grow a family
- Over a quarter — 26% — of millennials reported they were tired of their current home and that was driving their desire to purchase a home.
- Twenty-three percent of millennials reported a growing family as the main driver for wanting to buy a home.
- Twenty-two percent reported favorable home prices, 20% reported favorable interest rates, and 18% reported the desire to live in a safer neighborhood.
More than half of millennial home shoppers reported they are looking for a home below the U.S. median home price of $350,000
- Thirty-six percent are looking for an “entry-level” home at or under $200,000.
- Twenty-eight percent are looking for a home between $200,000 and $350,000
- This means 63% of millennial homebuyers are looking to purchase a home at or below $350,000 — the median price of a home in the U.S.
- Meanwhile, 37% of millennials are looking for a home over $350,000.
- Fifty-four percent believe home prices have hit their peak.
Most millennials aren’t trying to move very far
- Nearly half of millennials — 49% — reported they want to move within their current city.
- Thirty-one percent reported from within the city to the nearby suburbs. According to the survey, millennials expressed a greater desire to move to the suburbs than Gen X or Baby Boomers.
- Thirteen percent reported from one city to another within the same state, while only 8% want to move to a completely different state.