Retirement Age At 65 And Other Highlights Of National Day Speech
In his National Day Rally speech, Prime Minister Lee Hsien Loong announced several changes that will directly impact your savings and spending for years to come. Here’s what you should know:
Employment and re-employment age will be raised from 62 and 67 to 65 and 70 respectively by 2030
The changes will take place gradually where, retirement age will be raised to 63 in 2022 and then to 65 by 2030. Meanwhile, the re-employment age will be raised to 68 in 2022 and then to 70 by 2030.
Those who were born on or after 1 July 1960 will benefit from the higher retirement age and those born on or after 1 July 1955 will benefit from the higher re-employment age.
These changes follow the recommendations put forward by the Tripartite Workgroup on Older Workers that focused on the concerns of older workers in Singapore.
CPF contribution rates will be raised to 37% for those aged above 55 to 70
For those aged 55 to 60, the raise is 37%, while for those aged 61 to 65 and 66 to 70 the raise is 26% and 16.5% respectively. While for those above 70 years old, the contribution rate remains unchanged (12.5%).
This move aims to help older Singaporeans to build up their retirement funds. The increment is planned to talk place over the next 10 years.
University and polytechnic fees will be reduced for lower-income students
Lower-income university students will need to pay S$2,000 only compared to S$4,000 starting from the next academic year.
While, polytechnic students will only need to pay S$150 a year compared to S$600 a year, with a bursary.
The increase in bursary coverage by MOE applies to new and existing students and aims to make Singapore’s education system more accessible.
The move will also benefit middle-income students eligible for government bursaries.
Medical students will benefit from increased bursaries
In an effort to encourage good students to study medicine and to ensure doctors come from diversified educational and family backgrounds, the government will increase the bursary for medical students.
Combined with other university bursaries, medical students will only need to at most S$5,000 a year compared to an average of S$32,000 a year.
More affordable pre-schools and more families to receive means-tested subsidies
The number of government-supported pre-school will be increased to 80% compared to just about 50% now.
Further, pre-school subsidies will also be enhanced to cover more middle-income families. Currently, only families whose income do not exceed S$7,500 are eligible for additional means-tested subsidies. Now, the income ceiling will be raised to S$12,000 per month and as such, the means-tested subsidies will extend to 30,000 more households.
To ensure a good pre-school education since the early years can make a big difference to a child’s development.