In Focus
ECONOMY, HR & EDUCATION | Staff Reporter, Singapore

Why the ageing population could worsen wealth inequality in Singapore

Wealth may become concentrated within smaller families.

Singapore's ageing population could worsen income and wealth disparities, Deloitte said in its Voice of Asia report.

Singapore's economy in the coming decade could lose as much as 8.4% due to its changing demographics.

Besides this, demographic changes may worsen income equality (which remains high despite falling from a peak), and rising wealth inequality.

The policy on making up for lower birth rates by welcoming high-earning immigrants could make average incomes soar. This is despite incomes for the lower end of the population remain low.

A larger wealth inequality also looms for the country.

Household net wealth has more than doubled in the last decade, as household net worth reached $1.7m for Q2 this year. But rising wealth inequality also suggests rich Singaporeans' wealth is growing faster than those from poorer households.

"With falling birth rates, wealth may become increasingly concentrated within smaller families, and this could eventually exacerbate wealth inequality," the report said.

However, Deloitte also said that there might be some industries that could benefit from the rising ageing population.

Firstly, private healthcare, pharmaceuticals, biotechnology, and nutritional industries can benefit from higher spending on health care. This is due to the greater prevalence of chronic diseases from the increasing number of senior citizens.

Asset management services can also find growth from higher demand from senior citizens that want asset management, insurance, and both financial and legal services.

Lastly, Deloitte also said child-care and elderly-care industries can flourish from the decreased working adults supporting younger and elderly dependents.

Demand may rise for needs such as child-care services, healthcare monitoring devices, assisted living technologies, caregiving services, retirement homes, and hospices.

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