Youths without savings a ticking time bomb, says KJ

KUALA LUMPUR: The nation will be sitting on a “ticking time bomb” if youths do not have enough savings for their future, says Khairy Jamaluddin.

The Youth and Sports Minister said this was the worrying scenario and coupled with an ageing population by 2050, it could derail policies under the National Transformation 2050 or TN50.

“It is estimated that by 2035, 15% of the country’s population will be 60 or older.

“Not only are we becoming an ageing nation but people are expected to live longer.

“So, it is imperative to start saving now,” he said when launching the TN50 Private Retirement Scheme (PRS) Youth Event “Building Savings For The Future” here yesterday.

Khairy pointed out that about 90% of Employees Provident Fund (EPF) contributors have less than RM50,000 in their accounts.

“They will not have enough savings and will only be able to live comfortably for about five years upon retirement.

“But life expectancy is expected to reach 90 years, so if no measures are put in place, it would affect national policies,” he said.

To encourage more youths to save, Khairy announced that those aged between 20 and 30, who contribute RM1,000 to any private retirement scheme, would receive a one-time matching contribution from the Government this year.

He also announced that top students of the Youth National Training Institute would be allotted RM1,000 to open a PRS account.

He added that a portion of the national athletes cash incentives for winning major international tournaments would also be used to open a PRS account for them.

The PRS was introduced as a voluntary retirement savings to complement savings under the EPF.

The PRS incentive was first announced under Budget 2014 by Prime Minister Datuk Seri Najib Tun Razak. Under this scheme, the Government will top up a one-time RM500 for a minimum of RM1,000 in contributions.