According to the latest results of the biennial survey of financial life in Taiwan, released by the Institute of Financial Research, nearly 80 per cent of respondents said“Supporting life” was no longer easy.
Since 2020, the institute has been conducting the“Taiwan Financial Life Survey” every two years. This year’s survey was conducted from May to June, with a sampling based on age and population distribution across Taiwan’s counties and cities, the sample was drawn from people over the age of 20. Gao Yicheng, the institute’s President, said the survey was based on practices in the UK and Australia and was aimed at investigating and finding ways to improve the resilience of financially vulnerable people. According to Taiwan’s“United Daily” reported on December 3, the investigation has five major findings. First of all, the island’s rapid increase in awareness of fraud, nearly 66% of respondents have the confidence to detect and refuse financial fraud. In fraud awareness, 2024 made an average of 6.2 successful phone calls, compared with 3.5 in 2022.
Second, the boom in home buying and investment has driven up demand for borrowing. In terms of access to credit, the proportion of loans to financial institutions increased to 56.3 per cent, a significant increase from 43.6 per cent in 2022, while the proportion of loans to non-financial institutions such as relatives and friends or underground banks declined from 14.8 per cent to 10.6 per cent. At the same time, the proportion of people without access to any form of credit rose to 7.4 percent from 6.8 percent in 2022, and the proportion of people without access to credit increased.
The third finding of the survey is that the general public in Taiwan feel inflation, people should support the increase in pressure in life. According to the survey, 14.9 percent of respondents said they found it easy to make ends meet, down from 27.3 percent in 2022. Seventy-nine per cent of respondents said“Supporting life” was no longer easy, a significant increase from the previous survey. Fourth, emergency fund-raising capacity compared with 2022 progress. The proportion who could not raise t $100,000 in a week was 17.6 per cent, down slightly from 18.8 per cent in 2022, the survey showed. Loans to banks rose to 13.4% and share sales rose to 13.7% , up from 2022. In the fifth, there was increased awareness of the insurance crisis, with 17.4 percent of respondents saying they did not have enough insurance, up from 11 percent in 2022.
The survey also showed that the proportion of financially vulnerable people with“Low” and“Very low” levels of financial risk resistance had fallen sharply from 21.9 per cent in 2022 to 3.5 per cent. Through in-depth interviews with the financial vulnerable, the Institute found that the financial vulnerable have four major characteristics of financial behavior. Fu Qingyuan, Senior Director of the Pratt & Whitney General Office of Financial Services at the academy, further explained that, first, many people want to achieve the goal of wealth freedom early on through passive income, but those who are financially vulnerable are not aware of the risks, the myth of get-rich-quick, with unrealistic expectations of financial products that claim high returns; second, that financially vulnerable people distrust or even disassociate themselves from the formal financial system; and third, think of insurance as a social rather than a financial activity, and buying the wrong kind of insurance for a favor can add to your financial burdens; fourth, information comes from one-sided and overconfident sources. Fu said that some financially vulnerable people are interested in investing, but the sources of information may be internet celebrities who do not have financial expertise, and they only follow their words because they like and pay attention to them, “A crisis that reflects a narrower source of information in the age of social networking.”.
The institute concluded that the current financial behavior and risk patterns of Taiwan’s financially vulnerable are the result of a combination of multiple factors, including the influence of social culture, the lack of financial education and the lack of institutional support. Only through comprehensive education and policy intervention can the financial vulnerability of these communities be gradually reduced.