Hongkongers are taking a closer look at their finances and spending habits amid disruptions in social and economic activities from the coronavirus pandemic.

A survey by Sun Life Hong Kong finds a generally cautious attitude towards managing finances. Amid the health crisis, respondents are willing to reduce expenses on entertainment, clothing, beauty treatment, and haircuts by an average of 35%, as well as their dating expenditures by an average of 30%. Approximately 40% of respondents say they have taken action to manage their finances due to a worsening economy and concerns over layoffs and paycuts.

For its latest “Consumer Finance During Pandemic” report, the company commissioned Cimigo Limited to survey 1,020 Hongkongers, aged 20 to 40, on their views and thoughts on consumption, financial wellbeing, and retirement savings. The survey was conducted via online questionnaire between August 5 and August 16 2020.

The survey finds that 63% of respondents did not “revenge spend” in the past months, of which 27% are worried about the economic and employment outlook and want to keep more cash on hand. While close to 40% of respondents expect around HK$10,000 to HK$30,000 (US$1,290-US$3,871) in travel expenses for the year, over half say they will reallocate such expenses to reserve cash for emergency situations or to support normal daily expenditures.

Also, over 40% of respondents who regularly search for consumer discounts do so at least once per day, and 31% say they are sharing offers with friends and family more frequently since the pandemic. While those who regularly search for information related to investment and savings are less in comparison, 21% indicate that they are sharing such information with their close friends and relatives more frequently since the Covid-19 outbreak.

Respondents who say they are “trying hard” to plan for retirement has risen from 37% before the pandemic to 43% after the pandemic. Those who say they are “trying very hard” is up from 5% before the pandemic to 11% after the pandemic.

Half of the respondents say the health crisis has inspired them to devise retirement plans while they have the means to do so, or believe extra effort and comprehensive planning is needed to reach their original goals. Many from the post-90s generation, aged 20 to 29, say reduced social activity during the pandemic has given them more time to plan for their retirement.

'Taking things as they come' 
One in four respondents think their financial status is stable, while one in five opt to “take things as they come”. For those with a stable financial status, almost 20% claim to be “disciplined” in financial planning, while around 30% claim to be doing the bare minimum.

On different approaches to financial planning, most respondents (32%) claim to be the “laid back” type before the pandemic. But following the outbreak, that percentage has fallen to 22%, while the “ambitious” type has risen from 13% to 22%. The results reveal that respondents have generally become more enthusiastic in managing finances due to the pandemic.

Respondents in general value a high-quality retirement life, hoping to stay healthy (91%), be financially independent (83%), and have companionship of families and friends (38%).

While self-owned property is not deemed a major benchmark of high-quality retirement life, purchasing a flat still significantly impacts retirement savings. Every fourth respondent believes in early retirement upon receiving rental income, while 16% of the respondents see mortgage payments as equivalent to saving for retirement. Nonetheless, close to 60% of respondents say they are willing to alter their home ownership plans to save money, as they feel reluctant to let home ownership negatively impact their retirement plans and other life goals.

However, Hongkongers generally lack knowledge on saving for retirement, and lack a clear concept of how much is actually needed. Some do not even have a fixed or regular retirement savings plan, instead saving up randomly with monthly discretionary income. In addition, around 10% of respondents are unaware of when to start saving or investing for retirement.

The survey reveals that 40% of those who proactively cut living expenses have allocated their money to savings, investments, or cash reserves to save up for a rainy day, says Haymans Fung, chief marketing and digital officer at Sun Life Hong Kong.  “However, many have yet to make any new investment or financial decision due to an uncertain future,” she notes. “Our mission is to assist our clients to have life-long financial protection and live a healthy life.  We are devoted to designing and providing comprehensive and attentive wealth management solutions based on our clients’ needs with the aim to help them accumulate wealth and achieve retirement goals during these critical times.”