CONTENTS ABOUT AIA STUDY BACKGROUND EXECUTIVE SUMMARY. KEY FINDINGS Quality of life Financial security Retirement Family and education REPORT THAILAND

Transcription

1 Report Thailand 2014

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3 CONTENTS ABOUT AIA STUDY BACKGROUND EXECUTIVE SUMMARY KEY FINDINGS Quality of life Financial security Retirement Family and education REPORT THAILAND 3

4 ABOUT AIA

5 ABOUT AIA INTRODUCTION TO AIA AIA Group has been meeting the risk protection and savings needs of people across the Asia-Pacific region since The Group comprises the largest independent publicly listed pan-asian life insurance group with operations in 17 markets in the Asia-Pacific region. It is a market leader in the region (ex-japan) based on life insurance premiums. Through an extensive network of agents, partners and employees across the Asia-Pacific region, AIA serves the holders of more than 28 million individual policies and over 16 million participating members of group insurance schemes. For more than 95 years, AIA has been helping our customers realise their hopes and aspirations. AIA uses knowledge of our customers needs and the experience that we have gained over the years to continue to develop a range of products and services including life insurance, accident and health insurance, savings plans, employee benefits, credit life and pension services that support our customers and their families through every stage of their lives, as well as our corporate clients throughout the region. REPORT THAILAND 5

6 STUDY BACKGROUND

7 STUDY BACKGROUND AIA SURVEY ON MIDDLE CLASS HOPES AND ASPIRATIONS INTRODUCTION TO THE STUDY As the leading pan-asian life insurance group, AIA created the AIA Survey on Middle Class Hopes and Aspirations to gain additional insights about the middle class and their priorities to strengthen our understanding of the middle class in the Asia-Pacific region. The inaugural survey conducted in 2013 covered the Greater China markets of mainland China, Hong Kong and Taiwan. In 2014, the survey focused on six Association of Southeast Asian Nations (ASEAN) markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The study provides an in-depth look at the fast-growing middle class group across four key areas, namely quality of life, financial security, retirement, and family and education. The survey sheds light on how the middle class perceives their lives, family and values, financial well-being and their career and retirement. It is clear that personal circumstance, culture, and the level of economic development in the market where respondents are living, are key drivers that greatly shape the hopes and aspirations of the middle class across the region. SURVEY METHODOLOGY This report specifically highlights the survey findings for Thailand, which were collected through 500 interviews conducted between July, 2014, with Thais who identified themselves as middle class (the same methodology was applied across all surveyed ASEAN markets): 400 online interviews were conducted with Thais aged The respondants are individuals who previously indicated willingness to participate in online surveys and who identified themselves as middle class. To improve age representation, an additional 100 face-to-face interviews were conducted with Thais aged 50 and older using random sample selection. The sample was evenly split between men and women The margin of error for the study is within +/-4.4% The study was conducted by Ipsos, a leading global market research agency REPORT THAILAND 7

8 EXECUTIVE SUMMARY

9 EXECUTIVE SUMMARY THE MIDDLE CLASS IN THAILAND THAILAND S MIDDLE CLASS HAS THE FOLLOWING CHARACTERISTICS: Quality over quantity Thailand's middle class respondents place health, career and a comfortable retirement ahead of wealth When asked to select their top five goals in life, 62% of Thailand s middle class mention being healthy, 37% list having a comfortable retirement and 36% hope for a successful career. Only 12% list becoming wealthy as their main motivation in life. Wealth and satisfaction An increase in wealth does not necessarily mean a similar increase in satisfaction Of those wishing to start a business, 62% cite lack of financing as a key barrier preventing them from pursuing this goal. The retirement challenge Saving for retirement remains a challenge for many members of the Thai middle class Twenty-three percent of the Thai respondents list saving for a comfortable retirement as one of the most difficult goals to achieve in life. Less than half of the respondents (47%) say they are confident that their family will save enough for a comfortable retirement, a lower percentage compared to an average of 56% of other ASEAN markets. Seventy-two percent of those with between THB400,000 - THB1,999,999 in assets report being satisfied; that figure rises only slightly to 73% among those with at least THB2,000,000 in assets. Generational caretakers The expectation persists that children should support their parents in old age Three-quarters of the Thai middle class (75%) think that children should be responsible for supporting their parents in retirement - the highest percentage compared to other ASEAN markets surveyed. In addition, 71% percent of the Thai middle class are currently supporting their own and/or their spouse's parents. This is also the highest percentage of all ASEAN markets surveyed. Barriers to entrepreneurship They are cautious about starting their own business Over one in four (28%) mention wanting to start their own business, however, almost one-third (32%) think that starting their own business would be one of the most difficult life goals to achieve. REPORT THAILAND 9

10 KEY FINDINGS

11 WHO ARE THE THAILAND MIDDLE CLASS? The majority (91%) of those interviewed consider themselves as middle class, including almost everyone earning at least THB50,000 per month. By contrast, fewer of those with household incomes below THB20,000 per month consider themselves as middle class. Percentage of population that considers themselves middle class according to monthly household income Below THB20,000 THB20,000 to 29,999 66% 84% The self-identified Thai middle class has an average monthly household income of THB67,998. They are well-educated, with 73% of respondents having earned a university or post-graduate degree. THB30,000 to 49,999 THB50,000 to 69,999 THB70,000 to 99,999 THB100,000 or more 88% 97% 96% 93% The Thai middle class has, on average, THB1.5 million saved in assets. REPORT THAILAND 11

12 QUALITY OF LIFE AIA MIDDLE CLASS INDEX (MCI) They are positive about the year ahead Thailand s middle class is more likely to think their life situation will improve rather than worsen over the next 12 months, as shown by an AIA Middle Class Index* (MCI) score of 63.3 (where 50 represents an equal balance of expectations for improvement and for worsening). AIA Middle Class Index Scores above 50 indicate an expectation of improvement for each aspect of life Overall Your family life Three-quarters (76%) think the Thai middle class will grow over the next 10 years suggesting that many Thais see that the improvement of their own wellbeing is tied to the improvement of the Thai economy as a whole. *The Middle Class Index is a summary score for whether respondents think aspects of their life will improve or worsen over the next 12 months. An index above 50 indicates they think their life will improve and an index below 50 indicate they expect their life to worsen. The index is calculated by the formula (P1*1) + (P2*0.5) + (P3*0), where P1 is the percentage who say that their situation will improve, P2 is the percentage who say it will stay the same and P3 is the percentage who say it will worsen. The value of your property The value of your savings Your home and the quality of where you live Your career or business The environment where you live The amount of money you have available to spend The amount of time you have for leisure Your health and wellbeing Your romantic life AIA GROUP LIMITED

13 QUALITY OF LIFE EXPECTATIONS RELATED TO LIFE EVENTS Those who moved house have the highest MCI Six percent of the Thai middle class have purchased a new home in the previous 12 months. These are the respondents with the most positive expectations, with an MCI score thirteen points higher than the average for all respondents at New relationships also have a high effect on expectations for the Thai middle class. Those who are married had an MCI score of 72.5 and those who have started a new relationship had an MCI score of Overall AIA Middle Class Index among those experiencing different life events All respondents Purchased a new home Got married Came into money/ inheritance Won a big prize Moved to a new city Started a new relationship Job promotion/ pay increase Started a new job Death of a loved one Purchased a new car End or lack of a relationship Increased debts Loss of job Birth of a child % 2% 5% 4% 7% 8% 24% 16% 6% 21% 7% 33% 4% 5% % who had experienced this change in the past 12 months HOPES AND ASPIRATIONS Health is a top priority for the Thai middle class When asked to select their top five goals in life, 62% mention being healthy as one of their top goals in life, followed by having a comfortable retirement (37%) and a successful career (36%). Thirty-six percent say having a successful career and 35% say being happy with who they are are the important life goals. These are well above the corresponding average of the ASEAN markets surveyed (30% and 25% respectively). The life goal of having a happy marriage or relationship is only mentioned by 27% of respondents, the lowest percentage among all ASEAN markets surveyed with an average of 40% holding the same view. Marriage is not as important to the Thai middle class compared to the other ASEAN markets surveyed. Seven in ten (72%) think marriage is becoming less important, which is notably higher than the average (52%) for the ASEAN markets surveyed and much higher than the respondents in Indonesia (18%). Top Five Goals in Life Being healthy A comfortable retirement Having a successful career Having enough for emergencies Being happy with who I am Owning a home Starting my own business A happy marriage/relationship Helping my children be successful Having a financial safety net Having peace of mind Paying for children s education Paying off debt Travelling the world Taking a vacation Owning a car Having children Having close friendships Getting more education 37% 36% 36% 35% 34% 28% 27% 25% 23% 20% 19% 18% 18% 13% 9% 6% 5% 3% 62% REPORT THAILAND 13

14 QUALITY OF LIFE WEALTH AND SATISFACTION They report lower levels of satisfaction Although broadly satisfied with their lives, the Thai middle class record lower satisfaction levels compared to the rest of the ASEAN markets surveyed. About seven in ten Thais (71%) are satisfied with their lives - a number lower than the rest of ASEAN markets surveyed with the exception of Malaysia (67%). Half (50%) of the Thai middle class considers themselves successful. This is slightly lower than the ASEAN markets surveyed countries, where the regional average is 54%. The percentage of those considering themselves successful increases with age with almost two-thirds (66%) of respondents aged between considering themselves as successful. Percentage of Thai middle class that are satisfied with their lives by total wealth (including property) DREAMS They have dreams and are optimistic that they will achieve them Three-quarters (74%) of the Thai middle class think that they will achieve their biggest dreams within their lifetime. Only 14% think that they will not be able to achieve their dreams within their lifetime. Their dreams are largely centred around health and wealth as well as the achievements of their children. Dreams and achievements 14% 9% 3% Less than THB400,000 THB400,000 to 1,999,999 THB2,000,000 or more 65% 72% 73% 74% Percentage of middle class Thai who consider themselves successful by age I am yet to fulfil my biggest dream yet I think I ll be able to achieve it I am yet to fulfil my biggest dream and I don t think I ll be able to achieve it years years years years 45% 46% 55% 66% Yes I have already fulfilled my biggest dream I have never thought about what my biggest dream is To be healthy and have sufficient funds for retirement Live comfortably without financial troubles Have enough money and a self-sufficient life, with no debt Send my children to college where they will have an outstanding performance Quotes from Thailand s middle class 14 AIA GROUP LIMITED

15 QUALITY OF LIFE STARTING A BUSINESS They aspire for a higher income by starting their own business Over one in four (28%) say they want to start their own business. This is the highest percentage, together with Indonesia, as compared with other ASEAN markets surveyed. Despite the desire to start a business, almost one-third (32%) think that starting their own business would be one of the most difficult life goals to achieve. Only travelling the world is thought to be a more difficult goal, mentioned by 50% of the respondents. A key motivation to start a business is for a higher income with 43% agreeing to this. One-quarter (26%) list becoming their own boss as the motivation. Among those who want to start their own business, 62% say that lack of capital is the key barrier preventing them from doing so. Thirty-eight percent (38%) still have not decided what type of business to set up. Why the Thai middle class want to start their own business LIVING ENVIRONMENT They live in the city, but several want to move out Sixty-one percent of the middle class correspondents live in cities, and a further 34% live in suburbs. Given a choice, more than half are quite satisfied with their (55%) current environment. However, (41%) of the respondents would like to move away from the city to the countryside, by a beach or to the mountains. Where the Thai middle class would buy a house if they had US$2 million to spend In the suburbs In a modern city In the countryside By a beach In the mountains In a historical city By a forest 2% 1% 7% 15% 20% 19% 35% 1%1% 4% 6% 7% 12% 43% Higher income Be my own boss Enjoying my work more Becoming an expert at what I do Having more free time Earlier retirement 26% Contributing to the community through running a social enterprise Bequeathing the business to my children REPORT THAILAND 15

16 FINANCIAL SECURITY ATTITUDES TOWARDS FINANCE The Thai middle class is pragmatic regarding their financial outlook Thailand's middle-class respondents who consider themselves financially secure according to monthly household income The Thai middle class is at a cross-roads concerning financial security. Sixty-three percent of the respondents feel financially secure. However, almost half (49%) believe that financial security is a never-ending pursuit. On average, the Thai respondents think they need at least THB13 million to be wealthy and at least THB3.6 million to achieve financial security for the rest of their life. Below THB40,000 THB40,000 to 69,999 THB70,000 or more 55% 64% 68% Thailand's middle-class respondents who consider themselves financially secure according to assets Below THB400,000 THB400,000 to 1,999,999 THB2,000,000 or more 51% 64% 69% 16 AIA GROUP LIMITED

17 FINANCIAL SECURITY FINANCIAL PLANNING The middle class in Thailand would like to be debt-free When asked what they would do if they came into a large sum of money, almost one in four (24%) say they would pay off their debts. Seventeen percent would save it in the bank and a similar percentage would invest it instead of spending it. Sixty-eight percent think it is more important to have financial plans than to live life for the moment. Nonetheless, this percentage is one of the lowest in the ASEAN markets surveyed, with only those in Indonesia (67%) being less likely to think financial planning is important. HIGH COST OF EMERGENCIES Cost of unexpected emergencies and healthcare are the biggest concerns In line with other ASEAN markets surveyed, 53% of Thai respondents list cost of unexpected emaergencies and 48% list healthcare as their top concerns for life costs. There is a notably much higher percentage of Thais who worry about the cost of transportation (18%) compared with the other ASEAN markets surveyed (8%). Biggest concerns regarding life costs Close to a half (47%) of the Thai middle class believe luck plays a big part in their pursuit of financial security this is the second highest percentage among other markets surveyed (with Indonesia being the highest at 60%). Men take a leading role in financial decisions in households. Sixty-four percent of male respondents say they are the ones in their households most responsible for financial decisions. By contrast, almost half of women (48%) hold the same view. Unexpected emergencies Cost of healthcare Saving for retirement Credit card debt Cost of raising children Cost of housing Cost of transportation Cost of children s education 24% 20% 19% 19% 18% 16% 48% 53% Actions most likely done if coming into a large sum of money Cost of groceries 12% Cost of insurance 8% Pay off debts 24% Cost of vacations 6% Save it in a bank Invest it 17% 17% Cost of technology /gadgets Cost of clothing 3% 2% Start my own business 13% Buy a house or car Give it to charity Go on vacation Share with family Spend it on children Spend it day-to-day 9% 6% 5% 5% 3% 1% REPORT THAILAND 17

18 RETIREMENT THE RETIREMENT CHALLENGE They are not too confident about their retirement savings Life goals thought most difficult to achieve Less than half (47%) are confident that they will have enough savings for a comfortable retirement a lower percentage than the average of the ASEAN markets surveyed (56%). They are less optimistic in having enough savings in comparison to Indonesia, Vietnam and the Philippines. Travelling the world Starting my own business Being healthy Saving for a retirement 32% 29% 23% 50% Almost one-quarter (23%) consider saving for retirement to be one of the most difficult life goals to achieve. Having a peace of mind Having enough for emergencies 20% 19% Having a successful career 18% Children being successful 17% Paying off debts 16% Having a financial safety net 14% Getting more education 14% Owning a home 13% A happy marriage 13% Being happy with who I am 12% Taking a vacation 9% Having children 9% Having close friendship 7% Paying for children s education 5% 18 AIA GROUP LIMITED

19 RETIREMENT RETIREMENT SAVINGS Most plan to retire but a number have not made plans yet About three-quarters (73%) of the Thai middle class have hopes to retire some day - this is the lowest percentage compared to the other ASEAN markets surveyed with the exception of Vietnam (68%). Twelve percent of middle-class Thais have not yet thought about retirement a higher percentage than for the rest of the markets surveyed (9%). There are also many Thais (8%) who enjoy work so much that they don t have plans to retire. This is the highest percentage for any ASEAN markets surveyed except for Vietnam (also 8%). Seventy percent of those respondents saving for retirement prefer to contribute to a retirement savings plan. A large percentage also rely on regular savings in the bank (58%) and invest in equities, bonds or mutual funds (56%). The Thai middle class on average think they need to save THB7.6 million for a comfortable retirement. Retirement plans and sentiments GENERATIONAL SUPPORT There is an expectation that children should financially support their parents following retirement The relatively low expectations for retirement needs in Thailand may be reflected in an expectation that children will help their parents in their old age. Three-quarters (75%) of respondents think that children should be responsible for supporting their parents in retirement the highest percentage compared to the other ASEAN markets surveyed. In addition, 71% of the Thai middle class is currently supporting their own and/or their spouse s parents. This is the highest percentage of all ASEAN markets surveyed. The importance of generational support correlates to the fact that over one-third (34%) believe it is more important to invest in their children s education than to save for their own retirement. This is a relatively high percentage compared with the figures for the other ASEAN markets surveyed where an average of only 25% think children s education should take precedence over retirement savings. Percentage agreeing that children should support parents in retirement, according to respondent s age 5% 12% years years 75% 76% 8% years years 70% 83% 73% I hope to retire someday I enjoy work so I don't plan to retire I don't expect ever to save enough for retirement I haven't thought about it (Due to rounding, the percentages in the chart do not add up to 100%.) REPORT THAILAND 19

20 RETIREMENT RETIREMENT PLANS They want to spend time with family and to learn new skills when they retire Which one of these they would most want to do when they retire Over one-quarter (28%) of the Thai middle class look forward to spending time with their family once they retire. Sail around the world Learn a new language 22% 41% Given a choice of a list of activities that they would like to do when they retire, about four in ten (41%) say they would like to sail around the world. Learn a musical instrument Paint a masterpiece painting 14% 7% More than one-third (36%) would choose to learn a new language or a musical instrument. This is a higher percentage compared with the ASEAN markets surveyed, where an average of 26% respondents want to learn a new skill. Hit a hole in one in golf Explore North or South Poles Run a marathon Climb a mountain 5% 5% 4% 3% Things they look forward to in retirement Spending time with family Relaxing Travelling Starting my own business Starting a second career Taking care of grandchildren Spending time with children Volunteering in my community 28% 19% 19% 15% 10% 3% 3% 2% 20 AIA GROUP LIMITED

21 FAMILY AND EDUCATION FAMILY AND CHILDREN ARE KEY MOTIVATORS Children and family are important aspects of their lives Plans for family by Thai middle class The majority (86%) of the Thai middle class either have children or are likely to have children some day. When asked what one thing most motivates them in life, one in five (21%) say it is to make a better life for their children, which ranks second behind financial security (22%). 10% 14% Have children still at school 38% Have children who have left school Will have children some day 19% May have children some day What motivates them most in life Becoming financially secure A better life for my children A better life for myself Becoming wealthy A better life for my parents Advancing my career / business Being respected by my peers 3% Receiving a good education 1% 12% 12% 9% 22% 21% 20% 18% (Due to rounding, the percentages in the chart do not add up to 100%.) Don't want children CHILDREN S EDUCATION They have very high expectations and are actively involved in their children s education A large majority (92%) of the Thai middle class hope their children will achieve a university degree, including nearly half (48%) who want them to have a post-graduate education. Almost all (96%) of parents are involved in their children s education, with 71% being very involved. REPORT THAILAND 21

22 FAMILY AND EDUCATION The Thai middle class sets aside around 6% of their household income as savings for the education of each child. Women are more likely than men to be the main person in the household responsible for their children s education (55% of women say are the main person compared with 48% of men who say this). Middle-class Thai parents own educational achievements HOPES FOR THEIR CHILDREN They tend to give children opportunities to succeed The Thai middle class respondents have mixed views on their children's future. Half (50%) think that their children s lives will be harder than their own. A healthy life is the most important goal they want for their children (76%). Many want their children to have good academic achievements (68%), a good career (64%) and have good virtues (54%). 14% 13% 20% Post Graduate University A-Level/Polytech Thai parents are very willing to guide their children to success. More than half (55%) think that they should give as many opportunities as possible to their children, compared to 45% who expect their children to be independent and find their own opportunities to succeed. By contrast, an average of 55% respondents in the ASEAN markets surveyed think that children should be independent. Other 53% Goals thought most important for their children Education goals Thai middle-class parents have for their children Good health Academic achievement 76% 68% A good career 64% 1% 5% 2% 48% Post Graduate Good virtues Nice possessions Financial success 54% 48% 36% University Good friends 35% 44% A-Level/Polytech Other None of the above General happiness Social status Having their own family Extracurricular activities Marrying someone wealthy 4% 2% 22% 21% 21% Romantic love 2% 22 AIA GROUP LIMITED

23 AIA GROUP LIMITED REPORT THAILAND AIA.COM