Friends Provident International has released a report highlighting the results of its latest Investor Attitudes survey conducted during the period from 7 October to 18 October 2013.
The survey drew responses from over 1,600 global expatriates and domestic affluent investors across Singapore, Hong Kong and the United Arab Emirates (UAE), uncovering interesting statistics on investors’ sentiments as well as investment and savings pattern across these regions.
Once again, saving for children’s education remains one of the top three priorities for Singapore affluent investors. This trend is also seen in Hong Kong and the UAE.
This latest survey revealed that a significant portion (73% of the respondents with children) start saving for the costs associated with university education before their child celebrates his/her fifth birthday; indeed over one-third (39%) of them start saving for their child’s education from birth.
At the other end of the spectrum, 7% wait until the child is at least 10-15 years old and 2% have not even thought about it. 67% of respondents are saving between SGD 500 to SGD 3,000 per month for their child’s education.
Over half of the respondents have identified the need to save for a typical three-year undergraduate degree course, whilst 33% intend to fund a master’s degree, 12% for a doctorate and 9% for an MBA for their child.
Chris Gill, general manager, Southeast Asia, Friends Provident International said, "It is encouraging to note that 98% of the respondents (with children) are aware of the need to save for their children’s university education. These results would appear to reflect an awareness of the intense competition in job markets globally where people are increasingly equipping themselves with multiple qualifications to ensure they stand out from the crowd."
The majority expect their children to attend a university in Singapore, whilst 39% expect to send their child to study aboard.
When asked what they thought the total cost to fund an overseas study programme might be, this prompted diverse views ranging from less than SGD 100,000 to more than SGD 250,000. The US, Australia and the UK are the most popular destinations chosen for overseas education.
Gill added: "The popularity of Singapore universities is unsurprising given that Singapore is an international city with world-class universities. Equally, pursuing a university degree is not only about attaining good grades, it is also about developing an individual to live independently, mix with and experience diverse cultures and gain different perspectives on life, hence the allure of an education overseas.
"It appears that the majority of the respondents have identified the significant costs associated with quality education and, quite rightly, they are putting their plans in place at an early stage. It is important to remember the actual funding required to support a child to attend university in 18 years time would be much higher than it is today caused by the impact of inflation, which historically has been higher for education costs than consumer price inflation (CPI). There are also many ancillary costs such as accommodation, books, computer equipment and subsistence, etc. all of which mount up. For parents who are planning to send their children to study overseas, they will also need to factor in the additional costs of travel as well as the currency exchange risk where the university fees are typically in a different currency to their current income."
Other findings from the survey:
The latest Friends Provident International Investor Attitudes Index in all three regions remains positive. Affluent investors in Singapore feel less positive about the current investment climate when compared to Hong Kong and the UAE with a small drop from 25 to 22 index points.
In terms of investment outlook, respondents remain broadly optimistic about the short-term. 52% expect to see investment markets improve over the next six months, whilst just 17% say they will be worse.
Considering gold hasn’t performed as well this year, surprisingly 67% still believe it will continue to deliver good returns over the long term compared to other "safe" assets such as cash and US government bonds.