Household resilience falls to 21% as inflation strains affluent budgets

Sun Life tracks a sharp drop in highly resilient households, down from 34% to 21% in a single year.

Financial resilience in Singapore has weakened sharply as rising living costs continue to strain households, according to Sun Life Singapore’s Financial Resilience Index: Asia navigates rising costs.

The share of highly resilient households fell from 34% in 2025 to 21% in 2026, whilst low-resilience households more than doubled from 9% to 20%.

Only 11% of respondents now describe themselves as very financially secure, down from 22% a year earlier.

Rising living costs are affecting all income groups, including high earners. Amongst high-net-worth (HNW) respondents earning at least $250,000 annually, 76% said inflation has made it harder to meet monthly expenses, whilst 59% expect moderate to significant lifestyle adjustments if costs continue to rise.

Despite this, 67% of HNW respondents still report feeling financially secure—showing that higher income provides some buffer but does not fully shield households from cost pressures.

Everyday essentials remain the biggest burden for households. Grocery costs affect 95% of respondents, followed by utilities (94%), healthcare (89%), cooking fuel (86%), and transport fuel (84%). Over the past six months, 80% said groceries and food saw the largest increase, ahead of utilities (58%) and transport costs (55%).

More than half of respondents (52%) identified the cost of living as the main barrier to improving financial control.

As a result, managing daily expenses has become the top financial priority for 55% of households over the next year, surpassing retirement savings (44%) and emergency fund building (37%).

The findings suggest many households are making adjustments that may affect long-term financial health.

Around 54% are cutting non-essential spending, whilst 24% are drawing down savings, another 24% are reducing or skipping essential expenses, and 14% have paused retirement contributions.

Whilst 69% of respondents agree that sufficient savings are critical to financial security, only 41% sad they could sustain themselves for more than six months without income or external support.

Amongst HNW individuals, 27% believed they could last more than a year without income.

Financial literacy remains a key differentiator in resilience.

Seven in ten respondents rated their financial literacy as basic or below. Those with higher financial literacy are significantly more confident—by 44 percentage points—and more optimistic about their financial future by 41 percentage points.

The report also highlighted rising use of generative AI (GenAI) in financial decision-making.

More than half of respondents (53%) use GenAI tools for financial advice at least occasionally, whilst 55% expect usage to increase.

Adoption is higher amongst HNW respondents, with 74% already using GenAI regularly and 69% expecting greater use ahead.

Christopher Albrecht, chief executive officer of Sun Life Singapore, said rising costs are placing sustained pressure on households across all income levels.

“Whilst affluent consumers may be better positioned to withstand financial shocks, resilience is not guaranteed by income alone,” he said. “As short-term cost pressures grow, it is increasingly important for individuals to build stronger savings, protection and wealth planning strategies.”

He added that whilst GenAI can support early-stage financial research, professional advice remains essential for navigating complex decisions involving long-term goals, protection, and wealth planning.