According to a new study by Nielsen, three quarters of Malaysians (74%) believe they will achieve all their financial goals for the future, with a significant proportion being aware of the need to take a proactive approach to saving/investing (49 percent say they will need to closely monitor and adjust investments from time to time in order to best meet their financial expectations). Conversely, about a quarter of Malaysians (26%) have no confidence that they will meet all their financial goals with either current or modified asset allocations.

The Nielsen survey results revealed consumers in Malaysia are more confident about achieving their financial goals than those in Vietnam (72%), Thailand (71%) and Singapore (65%). Consumers in Indonesia and Philippines were the most financially optimistic in the Southeast Asia region with 88 percent and 83 percent respectively believing they will achieve all their financial goals for the future.

“Recent events, such as price increases on certain essential goods and utilities coupled with the upcoming introduction of GST in April 2015 are affecting Malaysian consumers’ financial planning, and encourage them to proactively review their financial planning,” said Luca Griseri, Head of Nielsen’s Financial Services in Singapore and Malaysia.

Around seven out of 10 Malaysian consumers (71%) commit at least 20 percent of their monthly income towards achieving their financial goals, compared to Philippines and Vietnam (62%), Singapore (61%), Indonesia (58%) and Thailand (51%).

“It’s encouraging to see Malaysian consumers planning ahead when it comes to their finances and having set targets for savings and investments,” said Griseri. “Financial services providers have invested heavily in expanding the range of savings and investment vehicles available to consumers in Asia, such as private retirement schemes and innovative insurance products and as a result consumers have more choice than ever before.”

The Nielsen survey also revealed that health issues, unexpected household emergencies and retirement funds are the top three savings and investment priorities among Malaysian respondents, with an overwhelming majority of Malaysians actively saving or investing in these three areas or planning to do so in the future.

Close to half of Malaysians (48%) were actively saving to cover future health issues, while a further 48 percent planned to start saving to cover health issues in the future. Unexpected household emergencies and retirement funds were driving savings and investment of 46 percent and 43 percent of Malaysians respectively, while 49 percent said they intended to start savings for household emergencies in the future and 51 percent were planning to start investing in their retirement fund in the future.

Of the 48 percent of Malaysians actively saving to cover health issues, a diversified strategy using a mix of local bank accounts, life insurance and saving plans was most common. Among those Malaysians saving for retirement and household emergencies, at least half rely on current savings and time-deposits, while life insurance and government and private investment schemes are also popular choices for Malaysians looking to achieve their long term financial goals. 

“Many Malaysians rely on private savings as well as the Employee Provident Funds (EPF) to fund their retirement ,” notes Griseri. ” This multi-pronged approach is encouraging, as it shows a realistic understanding of what is required to fund one’s golden years and a desire to not depend on the government alone.”

In addition to health issues, household emergencies and retirement funds, Malaysian consumers are planning to save for longer-term issues such as their children’s futures and purchasing of their first-time main home property, as well as building financial contingency plans in the event of job loss.

While less than half of Malaysians are currently saving or investing for loss of income, their children’s future and to purchase their first home, around 50 percent intend to do so in the future.

“It is quite common (not only in Malaysia) that consumers defer investment or saving decisions: this indicates an opportunity to educate them about the different solutions that are available to meet their financial goals and how consumers can start them.” said Griseri