KUALA LUMPUR, Jan 27 — With living costs skyrocketing while the value of the ringgit drops amid falling oil prices, a survey by HSBC on Malaysia released today showed an overwhelming 81 per cent of its people are afraid they will be destitute upon retirement.

In its Malaysian report titled “The Future of Retirement: A Balancing Act”, the London financial giant also found that 49 per cent, nearly half of the 1,000 people surveyed, said they couldn’t save because they had to pay off debts.

More worrisome, over a quarter or 27 per cent of Malaysians surveyed, said they had no plans to save for life after retirement.

E.S. Lim, HSBC’s general manager in retail banking and wealth management speaks to reporters after the release of a report titled ‘The Future of Retirement: A Balancing Act’. — Picture by Melissa Chi

“Twenty-seven per cent of them have not started and on top of that 20 per cent of them actually think that even at the age of 45 or older, they actually do not need to save,” HSBC Bank Malaysia General Manager ES Lim said during a media briefing at the bank’s headquarters here.

He said with a bigger number of Generations X and Y in the population, a large number of Malaysians do not see the need to save for retirement as other priorities take over.

Lim explained that a typical household in Malaysia will need about RM5,000 a month.

“But the reality is that the majority of them or 31 per cent of them actual retirees are living with less than RM3,000 a month,” he said.

Lim found it alarming that one-fifth, or 20 per cent of those aged 45 and above were not saving at all for when they retire, though he noted over half of the retirees surveyed said they would have started saving when they were younger.

He added that 45 per cent said they would have saved more to improve their standard of living after they retire.

The official retirement age for Malaysia’s civil service is now 60.

Lim said 39 per cent of the working adults surveyed gave the reason that they could not afford to save, when asked why they were not preparing to line their post retirement nest financially.

Some said they have other immediate financial commitments with 38 per cent paying off their mortgage and almost half are paying off other debts, he related.

Over a quarter, or 28 per cent said they did not realise how much they needed to save for retirement, he added.

Lim also warned that many Malaysians allowed their contributions to the Employees Provident Fund (EPF) to lull them into financial complacency.

“Malaysians tend to have the perception that because we have EPF, our retirement is taken care of,” Lim said, calling this “artificial security.”

When asked what he thought the ideal percentage for people aged 30 and below to save was, he replied that ideally it would be 30 to 40 per cent of their income, but that no young person was likely to take this advice.

Realistically, they should aim to save 15 to 20 per cent.

“Like with fitness, if you get into the motion of saving and can see the benefits, this percentage can easily be scaled-up later.”