FWD survey finds more than half of parents save up to 40% of their family income for children’s future

Reliance on savings limits income growth in face of inflationary pressures

Hong Kong, 3 December, 2020 – A research survey conducted by FWD Hong Kong (“FWD”) entitled ”How parents of the new generation plan for their children’s future” (Remarks 1) found that many parents are tightening their belts to save for their children’s future.

The findings also suggested that parents predominately rely on bank savings for wealth accumulation despite the enduring low interest environment, limiting their ability to grow income in the face of inflationary pressures such as soaring education fees and property prices.

Kelvin Yu, Chief Product Officer of FWD Hong Kong and Macau  said, "FWD fully understands the challenges parents face when planning for their family finances. We’ve recently enhanced our savings and protection product “MaxFocus Signature Insurance Plan" with multiple juvenile benefits and flexibility to better support Hong Kong parents. With professional investment teams in place to help customers manage the portfolios of the plan and seize growth opportunities, we aim to help parents build more balanced family financial resources to better support their children’s future.” 

Conducted in the 11 cities of the Greater Bay Area (Remarks 1), the survey interviewed 500 Hong Kong parents (with children under 15 years of age) or couples who planned to give birth within five years. 

Key findings of the survey include:
1. Most parents are financially committed to support multiple life goals of their children

• Majority of parents’ savings are reserved for children’s future needs: Similar to parents from Macau and the Guangdong Province, the four prioritised life goals that Hong Kong parents hope to support their children for are further education (65%), property ownership (56%), career advancement (42%) and wedding expenses (42%). Over half of the Hong Kong parents (57%) are willing to reserve up to 40% of their family incomes for meeting children’s future needs, while Guangdong parents also sharing similar practice.
• Sacrifice quality of living for children's reserves: Even if they encounter cashflow issue, Hong Kong (54%) and Macau parents tend to sacrifice their quality of living and fewer choose to reduce the financial reserves for their children.

2. Parents lack adequate knowledge and financial tool to build their wealth

• Bank savings is the predominant wealth-building strategy: Bank savings is the predominant instrument adopted by parents from Hong Kong (66%), Macau and Guangdong Province to accumulate wealth.
• Insufficient knowledge on the wealth-building function of insurance products: Only half of the Hong Kong parents (54%) know that life and savings insurance can provide long-term growth in wealth, and that cash withdrawal can be made to meet contingent financial needs. In addition, only about 30% of Hong Kong parents know that life and savings insurance can be used as a means to combat inflation and build wealth, even fewer parents from Macau and Guangdong Province are aware of such product features.
• Recognise the importance of wealth inheritance: Even though nearly 90% of parents from Hong Kong, Macau and Guangdong Province agree insurance protection for future generations is important, only about half of them (46-55%) are aware that life and savings insurance can actually be used for wealth inheritance.

Parents’ attitude to financial planning impacts on family financial well-being and children’s conceptions on financial management
Rex Wu, Principal of HealthyMind Parents Academy expressed, “Healthy family finances should conform to the principles of the "family financial pyramid", to establish a solid base that serves as a safety net for emergency expenses such as medical care, followed by the middle level for daily household expenses, and finally the top-level as reserves and investments for future development.” Rex supplemented, “ Parents’ attitude and practice relating to financial management can pose significant influence on children’s perspective to proper financial planning. It’s critically important to adopt an adequate approach to family wealth planning in order to create a positive outlook for parents themselves, their children and the family as a whole.”

Obligations to reserve for the next generation provoke tremendous physical and psychological stress
Counselling psychologist Natalie Ng explained, “In today’s highly competitive and uncertain economic environment, many parents as breadwinners are required to work long hours and therefore spend less time with their children. It’s natural that they hope to make it up by providing more financial support to fulfil their children’s future needs. However, this self-sacrificing mentality can lead to unrealistic expectation gaps as well as put the overall financial well-being of the family at risk. This on-going vicious cycle not only will adversely affect the psychological well-being of the entire family, but also impact family relationships.”

While it is understandable that most parents are highly committed to reserving for their children, it’s important for families to achieve and maintain financial capability and sustainability for concurrent needs. Parents may consider making use of wealth management products and professional support to achieve long-term wealth growth and inheritance, while reserving for their children’s future pursuits.

Remarks 1:

This survey was conducted by FWD through a market research company Kantar Hong Kong. A total of 2,400 parents from Hong Kong (500 respondents), Macau (100 respondents) and the nine municipalities of Shenzhen, Guangzhou, Dongguan, Zhongshan, Foshan, Zhuhai, Huizhou, Jiangmen and Zhaoqing in Guangdong Province (total 1,800 respondents) were interviewed. Data analysis was completed in 2020.

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Key features of MaxFocus Signature Insurance Plan (“MaxFocus”):
1. Growth participating insurance plan | Professional management and investment
MaxFocus is a growth participating insurance plan. Its policy values comprise of guaranteed cash value, annual dividend (non-guaranteed) and special bonus (non-guaranteed). With a relatively high allocation in equity-type investments, the plan in the long term aims to surpass inflation and aims to bring higher potential returns than bank savings. It builds wealth with long-term growth potential while enjoying a stable dividend distribution.

In addition, the asset portfolio of the plan is actively managed by professional management team and is invested across different regions and industries to achieve investment diversification.

2. Choices of premium terms for selection and withdrawal to meet with family financial needs at different stages
MaxFocus offers premium payment term of 2 years, 5 years or 10 years, and allows cash withdrawal in different stages from the policy for emergency use.

3. “New-born Baby Award” to support the arrival of new family member
Babies of the insured will receive cash rewards as long as the eligibility criteria is met.

4. Unlimited times for change of insured to age 138 (age next birthday) for endless wealth inheritance
The change of the insured option is unlimited. The policy term will be changed to age 138 (age next birthday) of the new insured, thereby maintaining inherited wealth through generations.

5. "Outstanding Performance Awards" to encourage children to learn actively
The newly added award aims to encourage children as the insured on their scholastic success while the policy is in force.

6. Waiver of Premium on Death Benefit (Parent) Rider
In the event that the parent(s) (as a policy owner or parent contingent owner) of an insured child passes away before the end of the premium payment term of the basic plan, provided that the policy has been in force for 2 years or more, the future premiums of the basic plan and this rider will be waived until age of 25 (age next birthday) of the insured.


The MaxFocus Signature Insurance Plan is underwritten by FWD Life Insurance Company (Bermuda) Limited (incorporated in Bermuda with limited liability). The above information does not contain the full terms and benefits of the policy, key product risks, and major exclusions. For more details including the terms and conditions of MaxFocus Signature Insurance Plan, please refer to its product brochure downloadable at https://www.fwd.com.hk/en/save/maxfocus-signature-savings-insurance-plan/.

About FWD Hong Kong & Macau
FWD Hong Kong offers life and medical insurance, general insurance, employee benefits, and financial planning. Its life insurance and general insurance operating entities have been assigned strong financial strength ratings by international rating agencies — FWD Life Insurance Company (Bermuda) Limited (incorporated in Bermuda with limited liability) is rated “A3” by Moody’s and “A” by Fitch; and FWD General Insurance Company Limited is rated “BBB+” by Fitch. FWD Macau provides a suite of life and medical insurance.

FWD Hong Kong & Macau is a part of the FWD Group, the insurance business of investment group, Pacific Century Group. FWD Group spans Hong Kong & Macau, Thailand, Indonesia, the Philippines, Singapore, Vietnam, Japan and Malaysia.

By creating fresh customer experiences with easy-to-understand products supported by digital technology, FWD aims to become a leading pan-Asian insurer that changes the way people feel about insurance.

For more information about FWD Hong Kong & Macau please visit WWW.FWD.COM.HK and WWW.FWD.COM.MO.