Hong Kong adults more financially literate but show weak money behaviour

Younger adults are more likely to overspend and end up in debt.

Hong Kong adults have shown improved financial literacy but have also demonstrated weaker financial behaviour, according to a survey by the Investor and Financial Education Council (IFEC).

On a scale of one to 21, the city’s average financial literacy scorerose to 14.8 in 2019 from 14.4 in 2015 due to better scores in financial knowledge (6.2) and attitude (2.9). The build-up of financial knowledge is evident across all population segments, notably with mature working adults, pre-retirees, and retirees.

Economic uncertainties have spurred the city to consider emergency funds, with 55% saying they have enough savings to last six months or more. Those with financial goals increased from 52% in 2015 to 60% in 2019, with mature working adults (82%) and pre-retirees (70%) being more proactive than students (32%) and young working adults (53%).

However, the average financial behaviour score across all segments dropped to 5.8 in 2019 from 6 in 2015. Only 39% of respondents were satisfied with their financial status, down from 46% in 2015, with the number even lower (23%) amongst young working adults below 30.

However, when asked if they kept a closed watch over their financial affairs, the overall percentage fell from 82% in 2015 to 75% in 2019. Only 54% said they proactively work towards their financial goals, a slight drop from 58% in the previous findings.

Other less desirable financial behaviours include not actively managing MPF/ORSO schemes, where less than half (47%) of working adults reviewed their statements, whilst 11% admitted that they had never read these statements.

Amongst those without individual health insurance policies, one in five said they had not considered their protection needs, and only 50% compared product offerings from different financial institutions before making a purchase in the past two years.

In addition, 35% of young working adults spend more than they can afford at times, whilst 32% are in debt. They are also more likely to settle their credit card bills with minimum payment with 27% having done so at least once in the past year, compared with 7% of all respondents. This segment is less likely to set financial goals (53%) when compared with all respondents (60%).

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