Sun Life Financial Resilience Index: Only 11% of Malaysians Feel Financially Secure as Rising Costs Erode Financial Preparedness

Sun Life Malaysia today released its third Financial Resilience Index: Malaysia navigates rising costs, revealing how prolonged cost-of-living pressures are weakening the financial resilience of Malaysian households. While inflation continues to strain everyday families’ finances, the study finds a growing number of people are sacrificing long-term financial preparedness to day-to-day expenses.

 

More than eight in ten respondents (87%) say inflation has made it harder to meet monthly costs, while only 11% feel financially secured. The findings also show that 70% would be unable to cope beyond six months without external support if faced with a sudden loss of income.

 

Cost of living pressure hits household finances

 

The findings highlight inflation's real-world impact as geopolitical and macroeconomic headwinds, including Middle East tensions and the resulting oil price shock, squeeze family budgets. Rising everyday costs are the most immediate pressure on households in Malaysia, with grocery prices affecting 94% of people, followed by utilities (92%), transport fuel (94%), cooking fuel (89%) and healthcare (89%).

 

Nearly six in ten respondents (59%) say rising costs are the biggest barrier to taking control of their finances, highlighting how affordability concerns are shaping financial decisions in 2026. As a result, many households are making short-term trade-offs to manage daily expenses, often at the expense of long-term financial security.

 

Commenting on the survey findings, Ho Teck Seng, President and Country Head of Sun Life Malaysia said, "While inflation continues to influence everyday spending decisions, the bigger concern is its impact on long-term financial resilience. When households are forced to focus on immediate needs, it becomes more harder to build savings to weather future storms and stay on track towards longer financial goals.”

 

 

Fewer families firmly positioned to withstand financial pressure

 

In an uncertain economic environment, the proportion of highly resilient households has fallen from 30% in 2025 to 22% this year. As families live with a reduced financial buffer, only 11% say they feel fully secure about their financial situation, down from 16% last year, underscoring the scale of the financial impact across Malaysia.

 

In response to rising everyday expenses, people are shortening financial planning horizons and making decisions that compromise their long-term stability. Short-term decisions are becoming a key driver of declining resilience across the region; 27% of respondents are drawing down savings, 29% are reducing or skipping essential spending, and 13% have paused retirement contributions.

 

Managing day-to-day expenses is the top priority for 48% of people over the next 12 months, ahead of saving, investing, or long-term planning. More than half (60%) of people have no financial plan or are planning no further than a year ahead, and 70% would not be able to cope for more than six months without external financial support in the event of job loss or illness.

 

Financial literacy fuels confidence

 

While cost-of-living pressures are widespread across Malaysia, their impact is not felt evenly. Financial literacy emerges as a key differentiator, with those who have stronger knowledge and skills significantly more likely to feel confident about their financial situation and optimistic about the future, despite current challenges.

 

Households with higher financial literacy are more likely to feel confident (by 49 percentage points), more likely to feel optimistic (by 42 points), and less likely to experience frequent stress (by 15 points). These differences are also reflected in behaviour, as households with stronger financial capability are more likely to plan ahead and maintain longer-term financial habits, while others remain focused on immediate costs.

 

The study also reveals a significant shift in how Malaysians seek financial information. Six in ten respondents now regularly use generative AI tools for financial advice, up sharply from 18% in 2025. However, greater access to information has not automatically translated into stronger financial preparedness, reinforcing the importance of financial literacy and trusted guidance.

 

David Broom, Chief Client and Distribution Officer at Sun Life Asia, said, “As financial decisions become more short-term, the risk is that people lose sight of longer-term outcomes. Even with more access to information and tools, navigating complex financial decisions still requires guidance. This is where professional financial advice continues to play an important role in helping people turn short-term choices into long-term plans.”

 

The key findings report for Malaysia can be found here ​pdf icon SLM Financial Resilience 2026 Report.pdf.