EPF: Akaun Fleksibel withdrawals largely for short-term survival, but gap seen across income groups

KUALA LUMPUR, April 10 — Malaysians tapping into their Employees Provident Fund (EPF) savings under the Akaun Fleksibel facility are largely using the money to cover daily necessities, healthcare and debt repayments rather than discretionary spending, according to the pension fund’s latest report.

A recent EPF report titled "Enduring Today, Shaping Tomorrow: Akaun Fleksibel as a Financial Lifeline for Wellbeing" said the withdrawal patterns point to growing financial pressures, with members relying on their retirement savings to manage recurring expenses and short-term cash flow needs.

A survey of 14,204 members who withdrew from Akaun Fleksibel between May 2024 and June 2025 found that most withdrawals were for essential and emergency needs. About 93 per cent used funds for daily necessities, 81.7 per cent for emergency-related expenses, 74.4 per cent for debt and investment obligations, and 73.3 per cent for seasonal or lifestyle costs.

The most common expenditure was on food and daily necessities like groceries and infant formula and diapers, cited by 70.3 per cent of members. Health treatments accounted for 58.7 per cent, while debt payments represented 56.6 per cent. Only 18.3 per cent of members reported using funds for lifestyle purposes, indicating discretionary spending was not a primary driver.

“This relatively low share suggests that discretionary spending was not a primary motivation for withdrawals, with usage largely focused on essential and risk-mitigating expenditures rather than non-essential consumption,” said the report.

The report found that most withdrawals are relatively small and regular, indicating that members are using the facility as a supplementary income stream rather than for one-off large expenditures.

Usage patterns also varied by withdrawal frequency. High-frequency withdrawers, active in nine or more months during the period, tended to use Akaun Fleksibel for routine and seasonal needs, such as food and commuting costs.

Low-frequency withdrawers, active in one or two months, typically reserved the facility for episodic or emergency expenses, including job loss, business setbacks, entrepreneurial activities, or major home maintenance.

Demographics of withdrawal spending

Spending on essentials remains the main category across all age demographics, although younger members (under 30 years) tended to spend more on daily commuting and routine living costs.

Those aged from 30 to 49 tended to prioritise debt repayment, rent and utilities, while those over 50 tended to withdraw less overall, but relatively more for their children’s education or for festive occasions.

There is also a clear divide between lower- and higher-income usage, as lower-income earners channelled withdrawals towards food and other daily necessities as well as health treatments, while higher earners used them more for debt repayments and educational expenses.

“Those earning RM10,000 or above prioritise maintenance and unexpected events, whereas these categories were much less relevant for lower earners, indicating greater financial flexibility for those with higher income,” said the report.

In terms of ethnicity, food remained the largest expense item across all groups, with the highest shares among Bumiputeras (72 per cent), and lower shares among Chinese (61.6 per cent) and Indians (60.7 per cent).

Debt repayments were broadly comparable across ethnic groups, though slightly higher among Malays (58.9 per cent). Chinese withdrawers exhibited lower spending across most items but showed markedly higher usage for maintenance costs (44.3 per cent).

As of October 2025, nearly five million members below the age of 55 have made at least one withdrawal from Akaun Fleksibel, with total withdrawals reaching RM16.6 billion.

63 per cent or 8.4 million EPF members have not yet made withdrawals from their Akaun Fleksibel. More than half of them are not eligible to.

The EPF described Akaun Fleksibel as a “financial lifeline” that has helped ease immediate financial strain, particularly amid rising living costs.

It added that withdrawal activity surged during the initial months following the facility’s launch in May 2024, before stabilising into more consistent monthly usage.