Gig Workers Are Falling Far Behind On Savings
Singaporeans in gig economy jobs have an average savings gap of 55% wider than traditional “nine-to-five” jobbers, reveals new research by Manulife. The Manulife Investor Sentiment Index (MISI) polled 500 gig workers and regular employees to shed light on how the rising gig economy is changing the way Singaporeans earn, spend and save.
Gig Economy – Understanding the New Normal
The gig economy continues to grow rapidly as more Singaporeans seek alternative work options beyond a traditional 9-to-5 job. According to the survey, one in three Singaporeans is engaged in a gig economy job and almost half (49%) of those currently not in one have indicated interest to be part of the gig workforce. Key motivators cited for the rising popularity of gig economy jobs include additional source of income, job satisfaction, flexibility, and new opportunities.
While Singaporeans are generally optimistic about the opportunities provided by the gig economy, the survey revealed an underlying worry that gig jobs may one day take over the traditional workforce.
On the positive end of the spectrum, over 80% of respondents believe that digital technology will increase the possibility and flexibility of working after retirement and 68% feel that gig jobs would give them an opportunity to be business owners. At the other end, over half of those surveyed are concerned that gig work will steal jobs and 59% expressed worry that their current job would be fully or partially automated in the future.
Surviving, Thriving and Retiring in the Gig Economy
Despite the attractiveness and the growing number of contributors to the gig economy, the flexible nature of this alternative workforce has also ushered in a wave of new challenges.
Singaporeans in gig jobs are considerably less optimistic than their peers in terms of financial security with 61% expressing concerns about the unstable wage and the lack of protections specifically in the areas of retirement (74%), medical (71%) and income (71%).
Without the benefits and stability of a regular job, gig workers are notably most worried about retirement savings. The study revealed that Singaporeans are expecting to need an average of $1 million in savings to retire. 65% of respondents indicated that they will need to save more as income is less certain in gig jobs.
Everyone is battling the clock towards retirement as close to 40% of respondents are currently facing a savings gap of over $500,000. Among those surveyed, gig workers have an average savings gap of $893,000, a very concerning 55% wider than the $576,000 savings gap among regular jobbers. 2
While a majority of respondents own mandatory retirement plans, more than half feel that it will be insufficient especially if they are in gig work. To that end, over 80% of respondents are inclined to work after retirement, with half willing to continue working full-time.
Given the unpredictability of today’s landscape and the inadequacy of pension in ensuring a good retirement life, 70% of respondents will consider voluntarily subscribing to insurance or saving plans to secure an all-embracing retirement protection.
Kwek-Perroy Li Choo, Chief Customer Officer and Chief Transformation Officer of Manulife Singapore, said: “The gig economy has grown to become a massive opportunity and the rise of gig jobs has challenged conventional employment. At Manulife, we recognise the impact the gig economy has on employment and retirement planning, and remain committed to developing solutions that support our customers every step of the way, regardless of their vocation.”