6.3m EPF contributors under 55 have less than RM10k savings

Insufficient savings in the Employees Provident Fund (EPF) is at a serious level, with 6.3 million members under the age of 55, or 48 percent, having less than RM10,000 in their accounts as of Sept 30, said the Finance Ministry.

In a written reply posted on the Parliament website yesterday, the ministry said the figure rose from 4.7 million members (37 percent) recorded in April 2020, before the introduction of Covid-19-related special withdrawals.

“With savings less than RM10,000, members are expected to have a retirement income of less than RM42 per month for a period of 20 years.

“The additional withdrawals from Account 1 also have a long-term effect namely a significant reduction in retirement savings among EPF members,” it said.

The ministry was responding to a question raised by Zulkifli Ismail (Perikatan Nasional-Jasin) on the government’s initiative to address the issue of insufficient retirement savings among the people, compounded by the large informal sector and a higher dependency ratio.

The ministry said the issue is taken seriously, especially considering that the country is facing a rapidly ageing population which is expected to have a significant impact on the nation and people in terms of the economy, productivity, social welfare, quality of life, and health.

The government announced in Budget 2024 an increase in the matching grant limit under the i-Saraan programme from RM300 to RM500 per year, subject to a maximum limit of RM5,000 for each eligible individual throughout their lifetime.

- Bernama

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