Individuals belonging to Gen Z ( 2001-2020 ) lag behind those in other generations in both confidence and preparedness. Only 57% of Gen Z respondents feel financially secure, well below 69% of Baby Boomers ( 1946-1964 ), the most financially secure generation, and 66% of Millennials ( 1981-2000 ), a new report finds.

While time is on Gen Z's side, their investment approach suggests hesitation rather than ambition, with 59% describing themselves as conservative investors, pointing to a lack of awareness around how to balance risk and long-term reward, according to Sun Life Asia’s second Financial Resilience Index, which looks into how individuals across the region are managing their finances in today’s volatile financial landscape.

Gen Z is also the most isolated in their financial decision-making compared to other generations. More than a quarter ( 28% ) do not seek any advice at all, despite being the generation most in need of structured guidance and support. 

Notably, Gen Z individuals are also most likely to consult AI tools ( 19% ) for financial advice than other age groups – Millennials, 18%; Gen X ( 1965-1980 ),10%; and Baby Boomers, 11%.

“Gen Z has time on their side, but instead of confidence, we’re seeing hesitation and concern as they are coming of age in a world shaped by economic volatility and rising living costs. Strengthening their financial literacy and connecting them with a variety of trusted sources of advice will give them the tools to build a more stable future,” says David Broom, chief client and distribution officer at Sun Life Asia.

Short-term focus

After several years of high inflation, many people are struggling to manage their daily and long-term expenses. 92% of people are feeling the effects of persistent price increases, and 44% note a significant impact on their ability to cover monthly expenses, the report says.

As rising living costs continue to squeeze household budgets, more people are focused on meeting their immediate needs rather than planning for their future goals. Managing day-to-day expenses is the top financial priority for 60% of respondents, up from 54% last year, while retirement planning has dropped from second to sixth place this year – a clear sign that budgeting for the present has taken precedence over long-term goals.

In an uncertain economic environment, building emergency savings has also climbed the ranks and is now the second most important goal ( 42% ).

Achieving financial security is further challenged by a lack of long-term planning. Despite slight year-on-year improvements, long-term financial preparedness remains dangerously low. More than half of respondents ( 54% ) still lack a plan that extends beyond 12 months, and only 8% are planning further than 10 years ahead, revealing a widespread gap in financial foresight and resilience.

Bridging the resilience divide

The survey findings also reveal a stark difference between those with high financial resilience and those without.

High-resilience individuals – categorised in the survey as those having high ability to withstand financial shocks and meet their financial goals – are more likely to prioritize building emergency savings ( 43% ) and education for themselves or their children ( 39% ).

In contrast, low-resilience individuals – those with less ability to withstand financial shocks and limited confidence to meet financial goals – are more focused on paying off debt ( 42% ) or building emergency funds ( 40% ).

For high-resilience individuals, financial confidence also runs high – 83% are sure they can meet short-term obligations and 82% believe they will achieve long-term savings goals. Nearly half ( 45% ) say they could financially support themselves for more than six months in the event of a crisis.

This group is also more likely to seek professional advice, with 40% working with financial advisers. Many are taking proactive steps to improve their financial situation – 49% are reading up on personal finance and 45% are investing for stronger returns.

Only 25% of low-resilience individuals feel they can manage short-term finances, and just 13% expect to meet long-term financial goals. Alarmingly, 89% say they wouldn’t be able to support themselves for more than six months in the face of job loss or serious illness. Just 27% in this category consult professional advisers, relying more often on informal networks or social media.

"The findings from this research clearly underscore a growing divide between those who are actively building financial stability and those who are caught in a cycle of short-term survival. Financial literacy is more important than ever in today’s economic climate,” says David Broom, chief client and distribution officer at Sun Life Asia. 

The report was based on a survey of over 6,000 respondents across Hong Kong, the Philippines, Indonesia, Malaysia, Singapore, and Vietnam.