SINGAPORE – Divorcee Chua Lye Tszio, 78, who lives alone in a rental flat in Tampines and does not have a retirement fund, gets by on $600 a month from her four daughters.
But the amount is getting increasingly hard to stretch, with core inflation rate hitting a 13-year high of 4.8 per cent, and overall inflation reaching 7 per cent in July.
As the rate of core inflation goes up, seniors in Singapore aged 65 and above are bearing the brunt of inflationary pressures.
They have been receiving a smaller amount of cash allowance from their loved ones, according to a study by the Central Provident Fund (CPF) Board. At the same time, higher consumer prices have raised their expenses to 96 per cent of their income, higher than the average of 64 per cent, a DBS study showed.
The latest Retirement and Health Study by the CPF Board showed that the share of seniors who received cash allowance from their children dropped from 69 per cent in the two-year period from 2018 to 2019 to 64 per cent in the 2020 to 2021 period. Those who have a monthly allowance got 4 per cent less in 2020, from $500 to $480.
The board said this could be a reflection of the economic impact of the Covid-19 pandemic, when their children cut back on their cash allowances.
In the survey, 12,000 to 15,000 individuals were interviewed every two years since 2014 on their retirement and health needs.
Meanwhile, the DBS study found that those aged 58 to 76 have an expense-to-income ratio of 96 per cent, compared with 64 per cent for the average DBS customer.
“This suggests lower bandwidth among (baby) boomers, including seniors, to tackle inflationary pressures going forward,” senior economist Irvin Seah from DBS Group Research told The Straits Times.
“Though inflation will remain elevated this year, there are signs that it is near its peak, judging from the moderation in global prices for food, energy and commodities in the past three months,” he added.
Mr Seah said that from May 2021 to May this year, baby boomers’ spending on shopping increased the most, with a 47 per cent spike, followed by transport spending, which rose 44 per cent, and food spending, which rose 26 per cent.
The three largest components of spending are typically food, transport, and housing and utilities, he said.
He suggested that baby boomers can consider cutting discretionary spending, such as shopping.