With economic forecasts predicting a sluggish 2025, more than 4 in 5 Singapore residents are bracing themselves by taking proactive control of their finances.

Findings from the latest AIA Live Better Study shine a light on the aspirations and concerns of Singaporeans amid a challenging economic backdrop.

Only 47% are optimistic about the economy, with inflation and the cost of living topping the list of concerns for 50% of Singaporeans, the results revealed.

Planning early amid an anticipated economic slowdown

Worries over job security (35%) and income levels (34%) followed closely, illustrating a broad-based anxiety that leaves few spared from economic jitters.

Yet, rather than being swept up in despair, Singaporeans are tightening their belts and looking to the future with a measured resolve.

Over half (54%) of respondents believe financial readiness in the long run is more important in 2025 than in the previous year.

Their top three priorities for achieving financial security are clear:

• Savings (62%)
• A stable income (57%)
• The creation of emergency funds (52%)

Nearly half (48%) also recognise insurance as a vital element of long-term planning.

“Despite the expectation of challenging times, the people of Singapore are showing remarkable resilience and proactiveness,” said Irma Hadikusuma, chief marketing and healthcare officer at AIA Singapore.

“This reflects a maturing society which has a better understanding and appreciation of the value of planning early and planning well for their future and that of their loved ones, which is especially noteworthy as we celebrate Singapore’s 60th birthday this year.”

Cost-cutting and saving measures among Singaporeans

In a bid to cut costs, 59% of respondents are already planning to reduce daily expenses or defer big-ticket purchases. Many are also setting their sights on bolstering their financial armoury through measures such as:

• Building emergency funds (29%)
• Retirement planning (28%)
• Diversifying investments (27%)

Looking ahead, more than 1 in 5 respondents intend to increase their outlay on insurance (22%) and investments (27%) – an indication that Singaporeans are ready to invest in their future, come rain or shine.

Healthcare costs, too, are a significant worry. More than half (53%) of the respondents consider healthcare expenses to be steep, yet only 47% feel financially prepared to handle them.

In response, many are opting for a multi-pronged approach to tackle rising costs: 57% are turning to insurance plans, 56% are boosting personal savings, and 49% are relying on government healthcare financing and support.

Generational differences in saving and spending plans

A closer look at the data reveals a pronounced generational divide.

While 54% of younger adults aged 18 to 29 feel financially prepared to navigate 2025, only 34% of those in their 40s share this confidence.

Often caught in the proverbial “sandwich generation” – balancing the dual pressures of caring for ageing parents and nurturing their own children – older residents are adopting a more conservative stance.

The disparity extends to spending behaviours: just 34% of the younger group expect to cut back on daily expenses, compared to 47% of those in their 40s.

Meanwhile, only 35% of the young plan to reduce spending on big-ticket items against 45% of their older counterparts.

Employment stability remains a shared priority across age groups, albeit with differing strategies.

Young Singaporeans lean towards upskilling (40%) as a hedge against job loss, whereas 55% of those in their 40s plan to build savings and 46% intend to set aside emergency funds.

Furthermore, support needs vary: 40% of the younger group prioritise mental health and wellbeing support.

However, 52% of those in their 40s favour practical assistance such as job placements, career transition services, and access to online training programmes.