PETALING JAYA: ALMOST half of today’s young workers, aged between 18 and 35 years old, are in serious debt, a recent survey revealed.
The survey showed 47 per cent of young workers had a monthly debt of 30 per cent or more of their gross monthly income, classified as a serious debt condition.
Those in the 24- to 29-year age group were found to have the most serious debt problem.
The survey also found that debt issues were more prevalent among male respondents (55.7 per cent) than females (44.3 per cent).
Those earning between RM2,000 and RM3,000 a month also had the most serious debt problem.
This was most likely due to acquiring assets like a house, car and insurance or getting married, thus increasing their loan repayment obligations.
The Financial Behaviours and Financial Habits of Young Workers survey used a sample size of over 1,000 respondents from urban areas in Kuala Lumpur, Selangor and Putrajaya.
It was initiated by the Education and Research Association for Consumers, an affiliate of the Federation of Malaysian Consumers Associations (Fomca).
Speaking at the launch of the report yesterday, Fomca chief executive officer Datuk Paul Selvaraj said most young workers admitted to having little or no financial knowledge.
“Only 2.7 per cent of the respondents said they had strong financial knowledge, while an alarming 43 per cent had poor knowledge of personal finance,” he said.
He said nearly 60 per cent of those declared bankrupt in the country today were below the age of 44.
“The main reasons for this are outstanding car, housing and personal loans.”
He said many young workers were unaware or unprepared for retirement.
While retirement plans are a vital part of long-term financial planning, the survey found 37 per cent had not thought of retirement.
“Of those who did, 40 per cent were not satisfied with their preparations,” he said.
To address this worrying trend, Selvaraj said that Fomca had proposed that the government set up a National Financial Education Commission to coordinate financial education for all sectors.
– NST Online
