Here are 6 ugly facts about Singaporeans' incomes

There's a downward trend in average monthly incomes.

According to the Singapore Social Health Project 2013 by the National Volunteer & Philanthropy Centre, declining trend in average monthly incomes and the increasing cost of living have made many Singaporeans feel vulnerable, especially those from lower-income families. The inadequacy of CPF for many who are retiring poses a threat to the well-being of the fast ageing population of Singapore.

Singaporeans, especially the lower income, are increasingly finding it difficult to cope with escalating costs. The Gini coefficient has also increased,
reflecting greater income inequalities.

The report outlines six points that describe the current trends in Singapore's income security.

1. Real growth in average monthly household income per member increased for all residents in 2012; poor households suffered a decline in incomes. Income security in Singapore declined for the low income between 2010/11 to 2011/12. The lowest 10% are the hardest hit with a decline in wages in 2012.

Gross real median wages across the common occupations listed by the Ministry of Manpower fell in all nine occupation categories from 2007 to 2011.

2. Cost of living has increased, eroding the purchasing power of savings. The inflation rates of 5.8% in 2011 and 4.6% in 2012 were higher than the average inflation rate of 1.9% over the last two decades. The inflation rates exceeded the 4% Central Provident Fund (CPF) interest rates on the Special and Retirement Accounts.

3. Inequality has increased. The Gini coefficient for Singapore increased from 0.473 in 2011 to 0.478 in 2012. It is the second highest in the world according to the Human Development Report among "very high human development countries”. 

The share of income among the lower deciles has declined from 2000 to 2010. In 2000, the top 10% had 27.4% of the total share of income of resident employed households. In 2010, this increased to 30% and except the 9th and 10th deciles, all groups have seen a decline in the income share.

4. Indebtedness has increased. Consumer loans have increased from $41.7 billion in 2000 to $179.5 billion in 2011. This is largely contributed by hefty home loans. Also, the total number of main credit cards crossed six million in October 2010 and the rollover balances breached the $4 billion mark in November 2010. 

Rollover balances have been growing at an average annual rate of 11.5% from 2009 to 2011.

If the economy performs poorly and real estate prices decline, many individuals will be unable to pay off their debts. The bankruptcy rate has shot up by 28% between 2010 and 2012.

5. Poor retirement adequacy. The 2012 Global Pension Index measuring the strength of retirement income systems ranked Singapore 17th out of 18 countries for the adequacy of its system and 13th in terms of its overall score.

CPF alone is inadequate to meet the retirement needs of the majority of Singaporeans. According to a study, tertiary-educated Singaporeans who entered the workforce in 2010 with a pay of $2,560 and who go on to buy a five-room public housing flat worth about $560,000, would get monthly CPF payments of only 22% of their lastdrawn pay when they retire at age 65.

CPF was found to be adequate only for low income families, provided they do not withdraw money to buy property.

Based on CPF’s retirement estimator, the current Minimum Sum of $139,000 is only sufficient for Singaporeans earning a gross monthly wage of $1,100 or less.

6. Other marginalised groups are at risk of impoverishment. Single parent families, especially those headed by women are at risk of impoverishment due to lower wages and less support from the government. With increasing divorce rates, single-parent families are likely to grow in the future.

The disabled are at particular risk of falling through the cracks due to poor skills, limited employment opportunities and lower wages (if they do get employed), and they become more vulnerable as they age.

Though the employment of the disabled in sheltered work environment has increased over the years, the Enabling Masterplan 2012 recognised that this has not reached sustainable levels yet. Single older women with almost no savings and who may not receive as much family support are also at a greater risk of being marginalised.