KUALA LUMPUR (June 30): Malaysian youths are generally unable to manage their finances well, with most of them having low knowledge of the capital market products and low financial literacy, according to a survey by the Securities Commission Malaysia (SC).
The survey, titled “Youth Capital Market Survey A Malaysian Perspective 2022”, has a total sample size of 1,003 nationwide, covering market centre, urban and rural populations, ranges from age 18 to 40.
The survey found that Malaysian youths appeared to prioritise having emergency funds, savings to support family and paying off debts over building wealth and investment, which was only a priority for one-third of its sampled population.
“Therefore, respondents would use their income towards emergency funds and savings earlier in life and would only focus on retirement at a later stage,” SC said.
The survey also found that the majority of Malaysian youths’ income is spent on food, household expenses and debt repayment, leaving them with not much balance left for savings or investment.
“On average, only 17% (of income) is being set aside for savings and investment; of this only 8% is set aside specifically for investment purposes,” SC said.
SC said the lower-income segment feels financially stressed, as they feel that they do not have sufficient surplus for investment after they have set aside cash for emergencies.
“The pressure to keep up with appearance is apparent across segments. Controlling their expenses, such as putting a limit on eating out, shopping and travel, makes them feel that they are unable to enjoy the fruits of their labour,” SC said.
SC said that Malaysian youths are more aware of banking products and services over capital market products.
Among the capital market products, respondents generally were more aware of unit trust, the survey found.
“Unit trust is popular because there is greater awareness and access driven by agents, such as unit trust consultants and financial planners,” SC added.