Sun Life Indonesia Financial Resilience Index Reveals Gen Z As The Most Vulnerable Generation Amid Inflationary Pressure

JAKARTA - Sun Life Indonesia has released a second edition of the Sun Life Asia Financial Resilience Index: Racing Today 's Needs and Tomorrow's Goals, which explains in more detail how Indonesians manage finances amidst the growing economic challenges.

Although there has been a slight increase in perceptions of financial sustainability as a whole, this report reveals a significant financial resilience gap between generations. Gen-Z is listed as the most financially vulnerable group and has the lowest long-term resilience. In comparison, in fact 63 percent of Baby Boomer respondents feel financially secure, well above Gen-Z (49 percent).

Gen-Z shows the lowest level of confidence and maturity in financial planning among all age groups. Only 49 percent of them feel financially secure, compared to 61 percent Millennial and 63 percent Baby Boomer.

As many as 58 percent of Gen-Z refer to themselves as conservative investors. This shows a tendency to avoid risks and a possible lack of understanding of the importance of balancing risks and long-term returns.

More than a quarter of Gen-Z (29 percent) do not seek assistance or advice in making their financial decisions. This figure is the highest compared to other age groups. In fact, Gen Z is actually the group that most needs guidance and structure in building its financial future.

Interestingly, 21 percent of Gen-Z rely on artificial intelligence (AI)-based applications to conduct financial consultations, while Millennials (21 percent), Gen X (9 percent), and Baby Boomers (11 percent).

Kahj Lee, Sun Life Indonesia's Chief Client and Distribution Officer, said Gen Z had a long time to design their financial future, but many of them were filled with worries and doubts.

They grew up in an economic era full of uncertainty and high cost of living pressure. Increasing financial literacy and expanding access to reliable information can be key in helping them build long-term financial resilience," he said, in a written statement, Friday, June 27.

The inflation that has occurred in recent years has made it difficult for many people to balance their daily needs and long-term financial plans. As many as 92 percent of respondents claimed to feel firsthand the impact of inflation, and 46 percent stated that it had a major impact on their ability to meet their daily needs.

As a result, people's financial focus shifted to short-term goals. As many as 62 percent of respondents stated that managing money for daily needs is a top priority, a slight decrease from 63 percent in 2024.

Meanwhile, retirement planning, which previously occupied second place, has now dropped to fifth. This situation shows that people are now prioritizing their daily needs more than retirement planning, which was previously one of the main focuses.

In uncertain economic conditions, saving for emergency funds is now the second most important priority (42 percent).

However, the public's readiness to build long-term financial resilience is still relatively low. More than half of respondents (55 percent) do not yet have financial plans for the next 12 months, and only 9 percent prepare their financial plans for the next 10 years. This figure indicates the lack of long-term planning needed to achieve sustainable financial resilience.

The report also highlights the significant differences between individuals with high financial resilience and those with low resilience.

Groups with high financial resilience are able to face economic challenges without having to sacrifice long-term financial goals. In addition, they prioritize emergency funds (45 percent) and self-education or children (38 percent).

In contrast, individuals with low financial resilience focus more on debt repayment (53 percent) and emergency funds (45 percent). Only 27 percent of them feel they are able to meet short-term needs, and only 15 percent believe they can achieve long-term financial goals. In fact, 68 percent of this group says they will not be able to last more than six months if they lose their jobs or experience serious health problems.

Meanwhile, high-resilience groups show greater confidence: 81 percent feel they are able to meet short-term needs, and 87 percent believe they will achieve long-term savings goals. As many as 51 percent are even confident that they can last more than six months in an emergency situation. They also tend to be more proactive in managing finances, where 44 percent consult financial advisors, 50 percent regularly study financial topics, and 48 percent are actively investing.

Kah jing Lee added, this report shows an increasingly clear gap between those who are actively planning their financial future and those who are still trapped meeting their daily needs.

"In the midst of a challenging economic situation, financial literacy and planning are becoming increasingly important. Therefore, Sun Life is here and committed to providing relevant financial guidelines and solutions so that the Indonesian people can manage their finances more confidently," he explained.