Singapore - Most keep bonus spending habits despite gloomy economy

Despite dark clouds looming over the financial horizon and the likelihood of bonus payouts shrinking, Singaporeans say they do not intend to cut back on how they spend the extra cash in their purses.

Companies are expected to start paying out annual year-end bonuses over the next three months or so. To see what Singaporeans intend to spend the money on, The Sunday Times (SUT) conducted an informal street poll.

The two-day poll of 100 people, conducted in both the Central Business District and heartlands, found that the majority of Singaporeans foresee smaller bonuses this year compared to last year.

Almost 75 per cent polled said they believe their bonuses will shrink, which is a prediction seconded by human resource managers.

Assistant Director of Corporate Services at The GMP Group Josh Goh told SUT that most companies are very cautious with bonus payouts, and would choose to save the resources in case the economy takes a dive.

However, in a surprising second finding, the poll showed that despite acknowledging the chances of having less money in the bank, the majority of Singaporeans have no intention of saving their bonuses and will keep more or less to their previous year's spending patterns.

On average, most of those polled said they save about 46 per cent of their bonus, portion off about 7.5 per cent for investments and spend the remaining 46.5 per cent.

Travelling appeared to be the most popular expenditure choice, with nearly a quarter saying they would use the money on an overseas holiday.

Shopping came in second, with one in seven saying they intend to spend their bonuses on a new wardrobe.

About 11.5 per cent said they will spend on their families and children, and 8.5 per cent said they will spend on electronic gadgets.

While most were in a spending mood, some did say they intend to be more prudent and not spend unnecessarily. Nearly one-fifth said they will save more of their bonus this year.

Others said they will invest more of their bonus in hope of making more money through investment returns, rather than putting their money in the bank.

CIMB-GB Research regional economist Song Seng Wun, 52, advised Singaporeans to go for low-risk investments such as switching their assets to the US dollar, adding that the greenback is a safer investment option compared to gold and other currencies like the euro.

yamadak@sph.com.sg

AsiaOne

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