SINGAPORE: More people made top-ups to their Central Provident Fund (CPF) accounts despite the challenging economic conditions this year, including a growing number of first-timers and young adults.
The CPF Board said in a news release on Wednesday (Oct 21) that more than 198,000 top-ups were made under the Retirement Sum Topping-Up scheme between January and September, an increase of 34 per cent from the same period last year.
The top-ups amounted to S$1.81 billion, up 23 per cent from the same period last year.
There were close to 148,000 top-ups totalling S$1.47 billion during the January to September period in 2019.
The steps taken by individuals to pad their retirement funds come amid challenging economic and labour conditions brought on by the COVID-19 pandemic.
Like many countries, Singapore's economy has been battered by the COVID-19 pandemic. The country entered a recession in the second quarter after an almost two-month long "circuit breaker" period. Advance estimates for third-quarter data showed that Singapore's economy improved slightly after the phased reopening of the economy, although it still shrank 7 per cent year-on-year. Further job cuts are also expected as the pandemic continues.
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A third of those who made top-ups in the first three quarters were first-timers, the Board said.
It also observed that among the first-timers, a growing number are also below 35 years old, signalling that “younger adults appreciate the value of growing their retirement savings early".
“Comparing the first three quarters of this year to the same period in 2019, the increase in number of first-time toppers below 35 years old was over 70 per cent,” said CPF Board.
Top-ups under the Retirement Sum Topping-Up scheme go into the Special or Retirement accounts, which increase members' monthly payouts during their retirement.
Apart from the increase in the number of Singaporeans voluntarily putting in more in their CPF accounts, withdrawals from members aged 55 and above also fell.
“The total amount withdrawn has reduced by close to 20 per cent in the first three quarters this year as compared to the same period last year,” CPF said.
Individuals who make cash top-ups are eligible for tax relief of up to S$7,000 per calendar year if they do so for themselves. Those who also do so for their parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings are eligible for additional tax relief of up to S$7,000 per calendar year.