A survey of around 150 expats from the UK and continental Europe, conducted in April, showed that despite 85 per cent of respondents earning more money in Singapore than where they lived before, 22 per cent of respondents don’t allocate any annual income to any kind of retirement savings.

Some 73 per cent of those surveyed do save more than their previous location, however.

"It's important that wealth managers challenge their clients around the decisions made about salaries. I think that what happens is that an expat, who earns more money and pays less tax, needs still to consider his/her disposable income. Because people have more in their pockets they feel comfortable and don't feel an immediate need to do anything about it over their longer term savings," Neal Armstrong, chief executive, and principal officer, Standard Life Singapore, told WealthBriefingAsia in a phone call. "There does need to be a lot more of a focus on the future," he said.

The firm’s inaugural study of such expats’ behaviour showed that 83 per cent of them allocate up to 20 per cent of their monthly salary on vacation and travel, and 67 per cent of respondents save up to 20 per cent for short-term lifestyle and leisure habits and more than a third make no conscious effort to save anything.

The findings are significant as foreigners make up about 38 per cent of Singapore's population, up from about 25 per cent in 2000. The cost of living in the city-state is high, as the influx of expats has pushed up residential costs. Singapore has risen up Mercer’s most expensive cities list, rising two spots in 2012 to sixth place – a position it shares with Zurich - from eighth in 2011 and 11th in 2010 (source: CNBC). The most expensive city of all in 2012 was Tokyo.

Among other details in the Standard Life report was that 10 per cent of respondents devote more than 30 per cent of their monthly income on school fees, demonstrating the high costs for educating children in the city-state.

“At first glance, the results of our survey are promising and show that respondents are taking a step in the right direction by saving more,” Armstrong said. 

“However, as recently reported, Singapore is one of the world’s most expensive cities to live in1, making it easy to fall into the trap of spending more on short-term lifestyle luxuries, the abundance of nearby travel temptations and the commitment of returning home to visit family. This certainly seems to be the case for nearly a quarter of respondents who prioritise lifestyle choices over planning for their future,” Armstrong continued.

Prepared to stay away from home?

Although the prospect of retiring abroad appeals to almost half of respondents, some 62 per cent of respondents did not give their international needs top priority or look to make their savings as portable as possible, the survey found.

“Given the increase in respondent’s disposable income, it is interesting that nearly a quarter of respondents do not plan appropriately for their future. This is all the more concerning given the increasing absence of corporate pension schemes in Asia. With more people intending to retire abroad, a prudent approach to financial planning is essential to ensure that these future needs are adequately financed. The assumption that a state pension will always be available and adequate for the lifestyle they have become accustomed to, is today a risky one to hold,” he said.

The report comes after Standard Life established a Singapore office in October last year. The UK-listed financial services firm oversaw total assets under administration of $363 billion as at 31 March. In Asia and other emerging market regions, the firm provides retail savings and investments via Hong Kong, and also offiers life and asset management joint venture businesses in India and China.