RELOOKING INTO THE SENIOR HOUSING MONETISATION POLICIES: RESOLVING "ASSET-RICH, CASH-POOR" PHENOMENON IN SINGAPORE

Abstract

The ageing population in Singapore is constantly causing the old-age support ratio to fall; fewer young adults to support the elderly. The Singapore government had foreseen this issue in 1955, thus implemented the Central Provident Fund (CPF) to fund the retirement needs of elderly, without relying on the younger generation. Other than funding the retirement needs, housing needs and medical needs are covered. However, the housing need is in conflict with retirement need. The ability to use the CPF savings for housing would deplete the CPF savings that are meant for retirement. This gave rise to “asset-rich, cash-poor” elderly households as most of their CPF savings is tied to their housing assets and little is available for retirement. Furthermore, compounding factors such as the rising house prices and rising housing aspirations of citizens have worsened the “asset-rich, cash-poor” phenomenon. This study will explore the elderly housing monetisation choices in supporting their retirement consumption. From the extant literature, it reveals that most elderly citizens prefer ageing-in-place over moving to a new environment. Research hypothesis that the age and income level of an elderly affects his/her choice of housing monetisation scheme is formulated. Survey has been conducted for 131 elderly respondents aged 55 and above. Data collected from the survey are analysed by two statistical techniques, namely multinomial logistic regression and descriptive statistics. These analyses have shown that they preferred “Silver Housing Bonus” over “Lease Buyback Scheme”. Significant variables such as “Age” and “Household Income” are crucial in predicting the preference of an elderly but not for “Presence of Savings for Retirement” and “Size of Flat”. These analyses suggest a need to review the housing monetisation policies in order to match the genuine needs of elderly. With the possible changes to the policies, elderly citizens in Singapore would be able to age-in-place as well as retire with ease.