A survey by Sun Life Asia released this week points to a broad decline in household financial resilience across six Asian markets, as persistent inflation narrows budgets and pushes families toward shorter financial horizons. The insurer’s Financial Resilience Index, now in its third year, draws on responses from more than 6,000 people surveyed in May 2026 across Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. Among its headline findings: the share of households classified as highly resilient dropped to 25% from 32% a year earlier. Only 13% of respondents described themselves as fully secure financially, compared with 19% in the previous edition of the study.
Eighty-three percent of respondents said that inflation has made it more difficult to keep up with monthly expenses. Essential spending categories drove the bulk of the pressure: the cost of groceries was cited by 95% of respondents as an area where prices have increased, followed by utilities at 94%, transport fuel at 92%, cooking fuel at 91%, and healthcare at 91%. Broader global economic conditions – including unrest in the Middle East and associated increases in oil prices – have contributed to the squeeze on household spending across the region, the report said.
Nearly half the respondents, 48%, described rising costs as their single largest obstacle to managing their finances effectively. The data reflects how affordability constraints have come to shape financial decision-making in 2026 in ways that appear to be distinct from prior years. David Broom, chief client and distribution officer at Sun Life Asia, said: “What stands out this year is not just the scale of cost pressure but how it is changing financial behaviour. Rising living costs are forcing people to rethink how they manage their money on a day-to-day basis, with the price of food, fuel, and household bills placing increasing pressure on budgets. As a result, many people are becoming more focused on short-term financial decisions, and that shift is starting to affect their financial resilience.”
The report documents a pattern of financial decisions that prioritize immediate relief over forward-looking stability. Day-to-day expense management ranked as the primary financial concern for 53% of respondents for the year ahead – placing it above saving, investing, and longer-term planning combined. Data on specific coping strategies show the scope of the pullback. Twenty-five percent of respondents reported drawing down existing savings. Twenty-seven percent said they are reducing or foregoing essential expenditures. Ten percent have suspended contributions to retirement accounts. In parallel, 56% are cutting non-essential spending.
The cumulative picture is one of households with diminishing financial buffers. While 68% identified savings as the cornerstone of their financial security, only 39% said they have resources sufficient to cover more than six months of expenses without income. Sixty-one percent said they could not sustain themselves for more than six months if they lost their job or fell ill without external support. More than half – 55% – reported having no financial plan or one that extends no further than 12 months forward. Broom said: “As financial decisions become more short-term, the risk is that people lose sight of longer-term outcomes. Even with more access to information and tools, navigating complex financial decisions still requires guidance. This is where professional financial advice continues to play an important role in helping people turn short-term choices into long-term plans.”
The survey data reveals a pronounced divergence in outcomes based on financial literacy levels. Respondents who rated their own financial knowledge more highly were substantially more likely to maintain confidence and a long-range financial outlook, even under the same external pressures facing lower-literacy households. Among those with stronger financial knowledge, the confidence gap measured 48 percentage points above their lower-literacy counterparts. The optimism gap stood at 43 percentage points. Those with higher literacy were also 14 percentage points less likely to report frequent financial stress. Taken together, the figures suggest that knowledge functions as a buffer – not against the rising cost of groceries or fuel, but against the behavioural drift toward short-termism that the report identifies as a primary driver of declining resilience.
Despite that correlation, the majority of respondents fell short: 65% rated their financial literacy as moderate, low, or very low. Age-based differences in investment behaviour also surfaced in the data. Roughly 60% of respondents aged 18 to 34 identified as conservative investors, a higher share than any other age group. Among those aged 45 to 54, the proportion describing themselves as conservative fell to 52%, while 14% in that cohort described themselves as aggressive investors. The comparable figure among younger respondents was 9%.
One of the more notable shifts between the 2025 and 2026 editions of the index concerns the use of AI tools in financial decision-making. The share of respondents who said they use generative AI for financial advice at least occasionally jumped from 18% to 60% in a single year. Of those, 26% said they turn to such tools every time or most of the time when considering financial decisions. Adoption was not uniform across resilience levels: 45% of highly resilient respondents reported frequent use of generative AI, versus 14% among those with the lowest resilience scores.
The report cautioned, however, that greater information access has not produced a corresponding lift in financial confidence or preparedness across the broader population. When asked about the qualities they most value in a financial adviser, respondents pointed to clear communication of long-term risks and benefits, simplicity of explanation, and personalized guidance – attributes they associate with human advisers rather than automated tools.
The Financial Resilience Index measures household financial health across five dimensions: degree of financial security, length of planning horizon, capacity to weather financial shocks, financial literacy, and confidence in meeting long-term obligations. Households are grouped into low, moderate, and high resilience tiers based on their composite scores. The 2026 study was fielded in May 2026.
