GEORGE TOWN: Low savings and rising expenses are causing many in the lower-income bracket to tighten spending ahead of this year’s Hari Raya Aidilfitri.
Factory operator Mohd Noor Firdaus Abdul Rahim, 31, said he worries that his Employees Provident Fund (EPF) reserves may run dry.
Mohd Noor, who is married with a child, said fixed commitments already consume half of his monthly RM2,000 income.
“House rent, car instalment and medical insurance alone cost about RM1,000 every month.
“That leaves very little for daily expenses and supporting my family,” he said.
With his savings in the EPF already low, Mohd Noor said the newly announced EPF dividend provided little boost to his funds.
“I have recently withdrawn from Account 3 to cover expenses and the balance, which is already small, is slowly declining.
“Once it is gone, I am worried I may have to rely on debt,” he said.
Determined to improve his financial position, he hopes to advance in his career and increase his income.
“I want to upskill and hopefully get promoted to earn more.
“At present, I think earning RM3,000 monthly would provide better security and comfort for my family,” he added.
Under the EPF structure, 75% of contributions are channelled into Account 1 for retirement, 15% into Account 2 for pre-retirement needs, and 10% into Account 3 for flexible withdrawals.
Account 3, introduced in May 2024, allows members aged below 55 to access funds for short-term financial needs.
Retail assistant Andrea Tan, 24, said her EPF savings have yet to reach RM10,000 as she only entered the workforce less than two years ago.
“Sometimes when I check the balance, I feel worried because it doesn’t seem like much, especially when I think about retirement,” she said.
While she welcomes Account 3 as a safety net, she is cautious about making withdrawals.
“For now, my focus is to let the savings grow.
“I don’t plan to take it out because I know this is for my future,” she said.
Tan added that she hoped to build her savings as her earnings improve.
“I plan to save more and maybe make voluntary contributions when I can.
“Even if it’s a small amount, I believe it will make a difference over time,” she said.
On Saturday, EPF declared a dividend rate of 6.15% for both conventional and syariah accounts for 2025, with the total payout amounting to RM67.1bil for conventional savings and RM12.5bil for syariah.
In September 2023, it was reported that the issue of insufficient savings in the EPF was at a serious level, with 6.3 million members under the age of 55, or 48%, having less than RM10,000 in their accounts.
