More than half of Hongkongers lack six-month financial buffer

Nearly seven in 10 say inflation has made monthly expenses harder to meet.

More than half of Hong Kong residents would be unable to support themselves financially for more than six months without income or external assistance, as rising living costs continue to pressure household finances, according to a survey by Sun Life Hong Kong.

Sun Life's latest Financial Resilience Index found that 51% of respondents lacked sufficient savings to sustain themselves beyond six months if their income stopped.

The share of respondents classified as highly financially resilient fell to 23% from 30% over the past year. Meanwhile, moderate resilience rose to 67% from 60%, whilst low resilience increased to 11% from 10%.

Rising living costs were the biggest financial challenge. About 68% said inflation had made it harder to meet monthly expenses, and 30% identified the cost of living as the main barrier to improving their finances.

Food and grocery costs affected 91% of respondents, followed by utilities at 88% and healthcare at 87%.

To cope, 29% said they had reduced or skipped essential spending, whilst 21% had drawn on their savings.

Managing day-to-day expenses was the top financial priority for 57% of respondents over the next 12 months, ahead of retirement savings at 28% and healthcare spending at 24%.

The survey also found that 47% either have no financial plan or only plan up to one year ahead. Confidence in managing long-term financial goals fell to 50% year on year from 61%.

Whilst 71% said savings are a key foundation of financial security, many remain unprepared for income disruptions such as job loss or illness.

The study found that respondents with higher financial literacy were 35% more likely to feel optimistic about their finances.

The survey also found that the use of generative AI for financial information is also increasing.

Around 57% said they use the technology at least occasionally for financial advice, and 54% expect to use it more over the next year.

The report, however, noted that respondents still valued human support for complex financial decisions, particularly personalised recommendations, clear explanations and after-sales service.

The survey covered more than 6,000 people across six Asian markets, including 1,000 respondents in Hong Kong.