plan for retirement

If you are looking for a useful New Year resolution, make retirement planning a priority so you can take advantage of a new and important change to CPF that kicked in on Jan 1, 2025.

Those turning 55 now have the option of doubling their retirement savings, from the mandatory full retirement sum of $213,000 to the new enhanced retirement sum (ERS) of $426,000 for CPF Life.

If you make such voluntary top-ups, you will receive higher monthly payouts of about $3,300 from age 65, almost double the $1,700 payout for those who choose not to do so.

The chance to have a higher fixed monthly income in retirement is also open to folk over 55 if they make top-ups to their CPF Retirement Accounts to hit the new ERS with either cash or funds already in their CPF account. 

People in this group can log into myCPF portal to check the estimated payout they could get with their top-ups as they will hit 65 earlier and so receive payouts sooner.

The new ERS is a major boost to our retirement planning effort because the higher payout of over $3,000 a month means many of us can now rely on our CPF alone to have a fairly comfortable retirement.

Estimates by banks such as OCBC show that people who can get more than $3,000 in retirement income a month may even be able to keep a mid-range car and enjoy short overseas holidays every year.

This aspiration is certainly achievable for couples who plan for the new ERS together because it means that they can receive two sets of payouts from the national annuity scheme, or over $6,000 a month.

Such an amount is not something to scoff at because it means that in just 10 years, or by age 75, a couple would have received over $720,000, and $1.44 million by age 85.

These sums are just payments from CPF Life alone, and do not include other income sources you may have, such as interest earned from the remaining CPF balances as well as your bank savings and other investments.

Younger Singaporeans should not baulk at the $426,000 needed for the ERS because this sum is achievable if they are diligent in contributing to their CPF accounts as they continue working over the next decade or two.

Even those hitting 55 who are short of this amount should not lose heart because retirement planning is not a competition and does not have a cut-off date.

So long as you are keen to tap the scheme to boost your retirement income, you can continue to make gradual top-ups to your Retirement Account even as you work.

If you aim to save more, you will still get higher payouts. For instance, those who can set aside $300,000 instead of $426,000 can receive about $2,400 a month, which is still a decent retirement income.

Here are three other important points that you should know about CPF Life.

Cash Protection for Future

Your savings in the CPF account are protected from even lawsuits and can act as your personal reserve that can provide stable income even if the global economy is in a tailspin.

The non-profit CPF Life scheme is backed by the Government, so its monthly payout will remain stable, unlike payouts from private schemes which can be affected by fund performance, management costs and interest rates.

So you should always aim to hit the maximum sum for CPF Life to reap its guaranteed returns first, before you invest in other private retirement products.

In the past three years alone, close to 1,000 people have sought help at the Financial Industry Disputes Resolution Centre after they bought unsuitable financial products that resulted in losses.

It is fair to say that most of them were not aware of the benefits of CPF Life and so ended up buying private investment products which failed to deliver.

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For instance, a retired senior executive told Invest recently that he bought an annuity of close to $2 million as he hoped to get monthly income of a few thousand dollars.

He had to pay $500,000 and borrowed about $1.5 million from the bank. While the scheme was viable when interest rates were low a few years ago, it fell apart when his borrowing costs shot up. So instead of receiving his retirement income, he ended up having to pay the bank tens of thousands for his loan.

Ironically, if he had used the $500,000 to top up the Retirement Accounts for himself and his wife, they could have received up to $5,000 a month for as long as they live, with no strings attached.

So do yourself a favour – before you sign up for a fresh financial product for your retirement, visit the CPF office to find out how its risk-free and cost-free scheme can benefit you more.

Your own retirement matters more

Some people refrain from saving more for CPF Life because they have the wrong idea that they will be short-changed and their savings will be “gone” if they die early.

If the national scheme does not make money from you when you are alive, it will certainly not take advantage of you when you are no longer around.

The CPF Board states on its website that if a member dies after receiving a certain amount of monthly payouts, any unpaid portion from his CPF Life scheme plus the remaining balance in other CPF accounts will be paid to his nominated beneficiaries.

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It is noble for parents to worry about their children but they should put equal emphasis on their own retirement needs too.

Recently an elderly divorced couple had to go to court to fight over $600 of monthly maintenance because both sides ended up cash-strapped in old age, after splurging over $600,000 on their kids’ education.

They would likely not end up this way if both of them had planned for decent monthly payouts from CPF Life.

You should view CPF Life as your own retirement scheme, and not a legacy scheme for your beneficiaries.

If you are keen to give more to your children, you will do them a bigger favour if you make regular top-ups to their Special Accounts even when they are kids. This will give them a chance of having a lot more money when it is their turn to reap the benefits of CPF Life.

Cash is king in retirement

There is a reason why financial advisers always tell their clients to diversify their investments because this could save you from being insolvent in a downturn.

By all means, if you have plenty of spare cash, you can focus on higher-risk investments, such as investing in some US stocks that have delivered impressive capital gains for their investors.

But it still pays to have a solid fixed income back-up, such as CPF Life, so that you will always have enough money in your old age, regardless of how your other investments fare.

Some people think it is better to use up all their CPF and cash savings to buy a second property so that they can rely on rental income in retirement. But this will not come cheap as there are mortgage payments, income and property taxes as well as maintenance costs to consider.

More importantly, could you bear these extra costs if you can’t find tenants?

Finally, we invest to live, and not live to invest. And if we have done adequate planning, our retirement should be fun, without having to worry about money because a decent deposit will just appear in our bank account every month.

Tan Ooi Boon is the Invest Editor of The Straits Times

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plan holiday in advance but stay within budget

SINGAPORE – The new year has barely begun, but people have already been asking me what my travel plans are for 2025.

For those freshly returned from 2024’s year-end holidays, a way to counter the back-to-work drudgery is to begin planning all over again.

I admit that I have already planned for holidays until August, and it seems that I am not the only one.

Booking early is a travel hack everyone talks about when the topic of holiday planning comes up – how to stretch the budget most effectively while covering more ground.

It’s always a delicate balance between several factors, including the number of leave days to take, the travel period, the money spent and the enjoyment derived.

Ms Jacquelyn Tan, head of group personal financial services at UOB, has booked her flights for the year. “Book flights and travel packages as early as possible, preferably during periodic sales events organised by airlines and travel agencies, to maximise savings,” she said.

She also monitors the currencies of countries she intends to visit as early as possible, and buy them when the rates are favourable.

OCBC’s managing director of investment strategy Vasu Menon said he booked a trip to Phuket for June 2025 during the SQ sale from Oct 25, 2024, and saved almost 40 per cent on the cost of flights – the promotion offered flights for four people at only $678, including taxes.

“My family’s travel arrangements are usually made six months to a year in advance,” he added.

But even before making any bookings, setting a budget for the year is essential, experts said.

It is easy to get swept up in a wave of spontaneous trip planning, but that doesn’t bode well for the wallet.

Indeed, Instagram keeps feeding me content about visiting London as therapy when I am feeling depressed. While it makes for a good laugh to see such content, impulsively dropping money on air tickets without any proper budget planning will probably lead to financial issues later.

DBS head of financial planning literacy Lorna Tan said budgeting means being able to save at least 10 per cent a month, and having cash savings or liquid assets for at least three to six months of monthly expenditure.

And if you’re working in the gig economy, your emergency fund should cover at least 12 months of monthly expenses, she noted.

“It is prudent to have adequate protection and insurance too, including a suitable hospitalisation cover such as an Integrated Shield Plan, and critical illnesses insurance.”

She also advocated early planning, saying: “This can make the difference between booking a glass igloo in Finland with toilets and without. Imagine waking up and having to plod through the snow in minus 40 deg C to visit the toilet 15m away! All because you didn’t book the glass igloo with full facilities early.”

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Mr Menon noted that while there is no hard and fast rule on how much to spend on travel a year, 5 per cent to 10 per cent of one’s annual salary seems like a reasonable figure.

“Much also depends on how much you enjoy travelling and see it as a need to destress and how it competes with the other wants and needs you may have,” he said.

Besides booking cheaper flights early, another way to cut travel costs is to choose the right accommodation for your needs and preferences. Mr Menon tries to stay at serviced apartments with a kitchen as cooking also saves money, instead of dining out at restaurants all the time.

In a recent podcast with The Straits Times, millennial traveller Prisca Ang told me that choosing business hotels helped cut the cost of her trip to Japan. These hotels also have the benefit of being clean and located near transportation nodes like train stations.

Multi-currency e-wallet YouTrip’s chief operating officer Kelvin Lam said he chooses hotels near student hostels because these places offer cheaper amenities like coin-operated washing machines and beer.

Personally, I also pick Airbnb flats where possible, instead of hotels, primarily so that I can cook instant noodles for meals to save money. Revealing this fun fact made my podcast guests recoil in horror.

Mr Lam suggested a slight tweak to this common budget travel hack – cook food that is part of the country’s cuisine, instead of simply eating instant noodles. Doing this is good for the pocket and also gives you a taste of different flavours.

Another way to save money is to use multi-currency cards and accounts, instead of using credit cards that can have high conversion rates for each transaction in a foreign currency.

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Post-Covid-19, cashless payments have caught on; in fact, some places totally reject cash. As a result, cashless payment providers have pressed on with new innovations and initiatives to capture consumer demand.

For instance, Nets has established cross-border QR across Indonesia, Malaysia, Singapore, Thailand and China, so those who travel within this region can just scan the codes to pay via various apps.

This complements the use of cards – which is handy as not all street vendors have card acceptance points.

In December, digital banking platform Revolut announced that it will offer e-SIM and global data plans to customers. Those who use the Revolut app can install the e-SIM digitally and top up in the app as well.

Some banks also offer multi-currency options. DBS customers with a DBS My Account or Multiplier account can access and exchange 11 foreign currencies, which will be held in the account, akin to a travel wallet.

UOB has the multi-currency card UOB FX+, which is a debit card that also allows consumers to convert 11 popular currencies. It has grown in popularity along with the pent-up travel demand post-Covid-19: Newly approved applications for the card grew more than 40 per cent in October and November 2024, against the previous year.

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Having said all this, I sometimes need a reminder that travel is a luxury, not a necessity. In July 2024, a study showed that more than half of those polled said a yearly trip to a South-east Asian destination was essential.

It sparked a discussion in my social circles over whether travel is truly essential, like air-conditioning and a smartphone with a data plan, which the survey showed were also counted among essentials.

Travel is talked about so often that there seems to be this prevalent fear of missing out, or the idea that you will be left behind if you do not have an answer to the question, “Where are you going next?”

But travel can also be exhausting. My podcast guest, Ms Ang, said she needed “a holiday from my holiday”, hence defeating the purpose of having some rest away from work.

At the end of a holiday – after all the travel laundry is done and luggage is stored away – travel is, ultimately, a personal journey.

It has to be for myself, not the Instagram feed, or to answer the questions of others. And sometimes, merely taking the time to soak in Singapore or lie in bed might be just the ticket I need, instead of an expensive trip elsewhere.

Sue-Ann Tan is a business correspondent at The Straits Times, covering capital markets and sustainable finance. 

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invest the hard earned ang bao

SINGAPORE - “Hard-earned” is how I would describe the hongbao.

Collecting these little red packets of joy – or sometimes disappointment – takes a certain level of skill and finesse.

You have to possess a thick skin to offer Chinese New Year greetings to people whose names you can barely recall, or to charm them with wildly exaggerated promises of financial windfalls. 

Only when your sincere wishes win them over will they hand over the ultimate prize: the hongbao.

This is why it’s important to know where to park your hard-earned hongbao money, or any kind of spare cash. 

I’m planning to be risk-averse and save up my hongbao money or convert it into precious metals like gold, which is valued for its stability. At the age of 27, with big-ticket purchases like my first apartment on the horizon, every dollar will count. 

But to each his own, and with unique and ever-changing financial priorities, young investors should identify what works best for them. 

Ms Lorna Tan, head of financial planning at DBS Bank, notes that whether young adults choose to save or invest their hongbao money depends largely on their short-term financial needs.

She says that for young people who are still studying or serving national service, hongbao money, which is seasonal in nature as it is given out only during Chinese New Year or birthdays, can come in handy as an extra tool to help bolster savings. 

It can also be used for short-term targets like saving for a holiday. 

“For those who have started working, the amount received from hongbao is usually a small supplement to their annual salary, rather than a significant portion of their income. This means you have flexibility in how you choose to use it,” Ms Tan says.

Mr Timothy Ho, co-founder and managing editor of personal finance website Dollars and Sense, points out that hongbao are essentially “gifts”. 

“Since hongbao money is money you didn’t actively work to earn, apart from visiting your relatives to collect it, it’s an excellent opportunity to think about investing and growing your savings... It’s a bit like your parents giving you tokens to play at the arcade, an invitation to explore and try new things,” he says. 

“Even if you’re not naturally inclined to invest, using your hongbao money as a starting point for your investment journey is a great idea, and you will gain some basic experience in investing.” 

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Mr Ho also notes that while it is important for young people to cultivate a habit of saving, they can also benefit from investing in riskier assets, as any investment losses encountered could serve as valuable learning experiences.

“Losing a small amount at a young age can be a valuable experience: It teaches you how to manage your emotions and stay grounded when facing losses... This perspective helps counter the misconception that investing is always a straightforward journey of making constant gains,” he says. 

“That said, I would caution against making ‘investments’ in a speculative manner. Even if you make a profit from such speculative ventures, you might take away the wrong lesson – believing that generating returns is easy if you’re willing to take risks.” 

Investing in 2025 will likely create challenges even for the most seasoned investors, let alone young ones, due to the geopolitical and macroeconomic climate. 

Expected interest rate cuts could make higher-yielding, riskier assets like equities and cryptocurrencies more appealing, but a cloud of uncertainty still looms over the markets, given that US President-elect Donald Trump’s upcoming second term is expected to have an impact on trade flows and inflation. 

So how should young investors navigate the markets with their hongbao money? 

Timing the market is an extremely difficult feat that even institutional or highly skilled professionals often fail to achieve.

Young investors should consider taking a slow and steady approach to portfolio growth, as “time is on the side of those who can wait”, says DBS’ Ms Tan. 

“The global economy historically sees longer periods of growth than recession, and stock markets see longer bull phases, or uptrends, than bear phases, or downtrends,” she adds. 

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Mr Aaron Chwee, head of wealth advisory at OCBC Bank, says that while short-term market volatility and headwinds are expected, a pullback in asset prices could offer young people a promising opportunity to invest, particularly with a long-term perspective.

“Dollar-cost averaging is the ideal strategy to manage market fluctuations,” he says.

But Mr Chwee also noted that young people need to establish solid financial foundations before investing, such as building an emergency fund or clearing high-interest debts. 

For those with life-changing purchases on the horizon, hongbao money can also be parked alongside monthly income in more stable assets such as unit trusts or a balanced portfolio of equities and bonds.

“Say you intend to get married soon, or buy a house, and will need a pool of funds to pay for expenses... You can start to build up these funds by setting aside your hongbao money as well as an amount from your monthly income as a form of regular savings and put it to work,” Mr Chwee says. 

“If you are looking to buy a home or marry in three years, your investment time horizon is not very long. You may not want to take too much risk if you are investing to accumulate funds for a large purchase.” 

Hongbao money may feel like a small financial windfall, but I see it as a hard-earned reward – won through relentless flattery and greetings. 

So, when you’re handed a hongbao this Chinese New Year, consider using it to kick-start a savings habit, dip a toe in the markets, or inch closer to a life-changing purchase.

Timothy Goh is a business journalist at The Straits Times. He covers private equity, with a focus on start-ups and venture capital.

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reflections from st

These are my resolutions, reminders and reflections for the new year.

1. Don’t take life too seriously. Most times, it is only my ego that is hurt. And that may not be a bad thing.

This resolution forces me to examine myself often. I have come to realise that a lot of issues I struggle with are the result of my pride, which is easily bruised by words and actions. That is often the source of my misery and self-pity. I need to remind myself that not everything is about me.

2. The “likes” I get on Facebook do not affirm who I am.

This is a reminder to not base my self-worth on things that are transient and superficial. It also reminds me to live a life that is not driven by the whims of the latest fad.

3. If we want to change for the better, stop making excuses.

I aim to stop procrastinating. If something is worth doing, and you know it is what you have to do, then do it. Don’t stand in your own way to achieving personal breakthroughs. Like Nike says, just do it... already.

4. Overnight changes last only one night. True change takes time.

Nothing worth doing is easy and I have to give a life enough time to change. I learnt this the hard way when my three children went through their PSLE. I saw them through my own myopic lenses and focused only on the grades. But they all eventually bloomed in their own time.

And my son recently gave a good wrap-up for the year at one of our family gatherings. He reminded us: “Everyone is on their own journey, and it is okay to go at their own pace and give them the space to run their own race.”

5. True success is never allowing success to change us.

The best version of us is before success happens. This is to remind myself of where I come from, and not let achievements go to my head.

American medical researcher Jonas Salk once said to give our children roots and wings. I take roots to mean our humble beginnings. Never forget where we come from, and the struggles and the tears shed to arrive at where we are today. Once the roots are firmly entrenched, we can soar with wings confidently spread out to take us much farther.

Success then becomes about building character, rather than accumulating and flaunting wealth.

6. Never underestimate the power of choice.

When it comes to facing adversity, nothing is as bad as it looks or feels until I decide how I respond to it. It was the Stoic philosopher Epictetus who said that “people are not upset by events but rather by their opinions about them”.

7. If we can’t afford the time to understand people, then don’t insult their intelligence by trying to change them.

This is a wake-up call to listen intently for what is not said, because it is important that I put myself in the other person’s shoes rather than impose on him what I think is right for him. 

Everyone is going through a different journey. Be kind always, and seek to understand and lend a helping hand. At times, the best encouragement is simply silent company, to be one who listens more than he speaks.

8. Life may be short, but the journey is long. So always remember to live our life short on hate and long on forgiveness.

I trust this last point is self-explanatory.

Have a great 2025.

Michael Han is a father of three and managing partner of a legal firm.

qoo10 down fall

In late 2015, a founder of an e-commerce operations company I was advising confidently declared: “The future of e-commerce is in Qoo10. It’s more engaging for consumers, and our sales there are much higher than on any other platform.”

At the time, his optimism was well placed. Daily deals platforms like Groupon were faltering, the future of Singapore e-commerce early entrant Lazada was uncertain amid rumours of a potential Alibaba acquisition, and upstart Shopee – launched earlier that year – was little more than a Carousell copycat.

Qoo10, the daddy among them, was founded in 2010 – Lazada came along two years later – when the Singapore e-commerce industry was in its early stages. And yet, five years later, it still stood out. It was cool, innovative and ambitious, even building its own logistics arm, Qxpress, signalling a long-term commitment to Singapore’s emerging e-commerce market.

The company had quickly become a darling on the scene, appealing to both buyers and sellers with a user-friendly platform, aggressive marketing, an efficient loyalty programme and a focus on low prices and variety. 

But ever since Shopee and Lazada started firing up their growth engines, Qoo10’s glory days were over. The hammer in the coffin was the Singapore High Court ordering Qoo10’s liquidation early in November, highlighting a stark reality: Once a promising player in Singapore’s e-commerce scene, Qoo10 now joins the list of fallen early movers.

It is the end of an era and a cautionary tale. But it is also a reminder of the dynamic, ever-changing nature of the e-commerce industry in Singapore.

Bright beginnings

When Qoo10 was founded, it was well positioned to capitalise on Singapore’s nascent e-commerce opportunities. At the time, Amazon and eBay dominated the West, while Alibaba’s Taobao was already fairly established in China. These platforms gained some traction in Singapore with cross-border shoppers. 

Locally, companies like 65daigou (later Ezbuy), also founded in 2010, helped consumers access Taobao goods, and start-ups like RedMart were beginning to explore niche markets like grocery e-commerce.

Qoo10’s ability to seize trends early on was a significant strength. It launched campaigns that resonated with consumers, engaged sellers effectively, and built a reputation for offering great deals. Its investment in Qxpress streamlined logistics to ensure better service.

Perils of the first mover

In the technology ecosystem, being an early mover can be as risky as it is rewarding. Late movers can learn from their predecessors’ successes and mistakes and adapt quickly. First movers often become too entrenched in existing processes to pivot effectively, especially in fast-evolving industries like e-commerce.

Qoo10 faced a similar fate. While it initially succeeded by focusing on selection, price and savings, Shopee entered the market in 2015 with superior execution across these same areas.

Shopee’s gamified shopping experiences, coupled with targeted promotions like free shipping and seller engagement strategies, resonated deeply with consumers. Shopee began to capture the mass market, squeezing Qoo10’s relevance.

Lazada solidified its position with consumers as their preferred platform for branded goods, and Amazon also claimed a premium segment, both areas Qoo10 found itself ill equipped to serve. As a result, Qoo10’s position in the market eroded, slowly – then quickly.

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Momentum matters

As Shopee and Lazada gained traction, Qoo10 struggled to compete for resources. Bright university graduates flocked to Shopee, drawn by its rapid growth and ambitious vision. Investors favoured Shopee’s bold strategies over Qoo10’s seemingly more stagnant approach.

This wasn’t unique to Qoo10. Early movers here like Ezbuy and RedMart also failed to deliver on investor expectations. Foodpanda, once dominant in food delivery, steadily lost ground to Grab, which started its delivery services six years later but benefited from better execution and integration into its ride-hailing app.

For Qoo10, the loss of momentum to Shopee probably sealed its fate. Without a differentiated value proposition or extraordinary leadership to execute a turnaround, its decline became inevitable.

A perfect storm

While Qoo10 initially captured consumer attention with its deals and variety, cracks began to show in how it managed relationships with both consumers and sellers. Sellers increasingly faced delayed payments – in early 2023, reports surfaced of sellers not being able to withdraw their earnings.

This eroded trust and prompted many to shift their focus to competitors, who provided not only faster payment cycles but better tools and support for sellers, enabling them to scale their operations effectively.

Qoo10’s reliance on its digital tokens, known as Q*coins, also became a double-edged sword. While these tokens, which acted as a form of currency on Qoo10’s platform, encouraged loyalty and repeat purchases, consumers became increasingly frustrated with the tokens’ lack of transparency and usability.

Many consumers struggled to redeem the tokens or found them to have limited value, especially as competitors rolled out simple, gamified reward systems and enticing cashback schemes. As a result, Qoo10 gradually lost online shoppers to platforms that provided clearer value propositions.

Qoo10’s financial mismanagement further deepened its troubles. Reports of fund misuse and mounting debts undermined its ability to invest in critical areas like marketing, technology and logistics – areas where its rivals were pulling ahead. Shopee, which was buoyed by heavy investments from parent company Sea Group, executed aggressive marketing campaigns and built an ecosystem of gamified shopping experiences that kept users engaged. 

Qoo10’s failure to modernise its platform and innovate beyond its early successes left it stagnant. The logistical advantages of Qxpress, once a key differentiator, became less compelling as competitors developed more robust delivery systems. 

This combination of poor financial management, declining consumer trust and seller dissatisfaction created a perfect storm for Qoo10. 

An unpredictable landscape

The demise of Qoo10 underscores how precarious a lead can be in the ever-changing e-commerce industry. Indeed, while its internal woes were significant contributors to Qoo10’s downfall, it was the relentless competition in Singapore’s e-commerce landscape that played a decisive role.

With Singapore having a small consumer base relative to other South-east Asian markets, and one that is highly discerning yet price sensitive, I believe that while its e-commerce industry may be open to a disruptor, it has room for only a few dominant players. 

And as the bar of offering a drastically better value proposition becomes higher, it will be more difficult for new entrants to the industry to break through.

So far, consumers have enjoyed the benefits of the e-commerce evolution – better selection, faster delivery, improved quality and greater savings – as platforms vie for their attention. 

But a market dominated by a few giants could theoretically reduce competition over time, potentially leading to less innovation and higher prices. 

The future of e-commerce in Singapore remains unpredictable for now. But history has shown that the industry thrives on disruption. Whenever the dominant incumbents start to slack off, new players will find cracks in the wall to redefine the game with fresh approaches and unique value propositions.

Today, the e-commerce landscape continues to shift. Shopee’s logistics arm, SPX Express, is poised to overtake J&T Express as the largest logistics provider in South-east Asia, solidifying its dominance. 

Meanwhile, Temu, the global offshoot of Pinduoduo, is rapidly expanding in the region and may soon set its sights on Singapore, bringing with it a model of aggressive price competition and hyper-localised offerings. Cross-border platforms like Taobao are also gaining momentum.

The next wave of disruption is always just around the corner. Ultimately, the market’s capacity for fresh competition will depend on whether newcomers can differentiate themselves and avoid the pitfalls of past players.

Li Jianggan is CEO of Momentum Works, a Singapore-based venture builder and research firm.

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meritocracy

Parents do a lot for their children in Singapore.

Many go to great lengths to secure places for their kids in coveted primary schools and send them for private tutoring. Such competitiveness means that families spend more and more time and money, just to outdo each other.

More recently, the north-east region has witnessed the proliferation of “dedicated enrichment zones”. These have now expanded their offerings to cater to pre-school children, opening up a new frontier in the educational arms race.

As a mother of two young children myself, I’ve been in countless conversations with other parents about schools and extracurricular activities. In my experience, while most parents would personally agree with Prime Minister Lawrence Wong’s assessment that the definition of success should go beyond academic and material achievements, many may nevertheless choose to stick to the old formula when it comes to their own children.

Yet amidst all the competition, many are unhappy with having to be more kiasu, literally “fearful of losing”, than one would otherwise like to be.

A culture of hyper-competitiveness

So what exactly are parents fearful of?

Perhaps the most obvious answer is that parents fear seeing their children at the bottom of the heap in a system that concentrates rewards at the top. To get up there, one must outperform peers in assessments from classroom to workplace.

In the past, parents would receive school report cards that clearly indicated a student’s exact ranking in class as determined by exams that started as early as Primary 1. This information, which indicated how far a student was from the top, likely compelled some families to get more heavily involved.

Today, primary and secondary school students no longer have to sit mid-year examinations, and the youngest would also be spared from testing until Primary 3. Moreover, starting this year, academic streaming has been removed in secondary schools in favour of subject-based banding. By diversifying from the use of single metrics, these moves have reined in the stressful practice of student ranking.

Although these institutional shifts can take some of the edge off the pressure on parents, some families have got around them by sending their children for mock examinations at private centres. Similarly, when primary school registration rules were amended in 2021 to double the number of places reserved for the most competitive phase, parents’ chat groups and forums immediately discussed strategies to get ahead of the competition.

These responses suggest changes to the educational system and rules can do only so much. As long as parents feel that some schools and pathways are more prestigious than others, they will continue to feel the pressures of a hyper-competitive culture.

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Parental obligation and uncertainty

One reason that parents are so competitive is that they feel their children are vulnerable and depend upon them to provide help and guidance. Driven by a sense of duty, they find it difficult to defy crowd wisdom because, in future, they might be accused of being irresponsible parents. This also accords them with the moral authority to override any childish protestations as the adult “voice of reason”. The forces at play are especially intense if the stakes are determined at younger ages.

Another problem is that parents have to take decisions today without full information on their children’s future preferences. Uncertain where their children’s passions will lie and what their material aspirations will look like, parents are more likely to avoid risky choices in favour of safer options, which is doing what everyone else is doing.

These dynamics restrict the choice sets of parents, often at the cost of the well-being of the students themselves. Stress levels among Singaporean children have increased and academics play a big part. This is likely linked to why children have been reporting more mental health issues, with one study estimating that children lose 24 days of school per year on average due to depression or anxiety symptoms.

While experts warn that busy parents may not detect issues or be equipped to provide support for their children’s mental health, a separate set of risks also arises from the opposite direction, where overly intensive parenting leads to anxiety and weakens the ability to face failure among children.

Some parents may feel that these costs are worth it if it means that their children will have a brighter future. But it doesn’t make sense to pursue something at all costs, and yet take a naive and uncritical view of the expected gains, which can be very far from what is imagined as to how far they actually go towards fulfilment and well-being. A culture centred on academic performance and failing to properly value children’s holistic development leads us to short-change ourselves and our loved ones.

Making merit less about relative performance

Apart from academic ability, we need to focus on skills and competencies that contribute towards a child’s holistic development while tamping down excessive competitiveness in a merit-based society.

These must meet two criteria. First, they need to be highly desired by future employers, colleagues and society at large. Second, they need to be observable, measurable and yet, relative to academic performance, less given to competitive pressures that can spill over to parents.

Such competencies should also be independent of socioeconomic background. This can help bolster the institution of meritocracy as an underlying governing principle. This has come under increased scrutiny as some feel the odds of accumulating merit are stacked against the disadvantaged, who are further made to feel undeserving.

What fits the bill are pro-social skills that include diligence, resilience, honesty, humility, kindness, and desire to keep learning and contributing to the community. These attributes are not only highly sought after in professional settings, but necessarily involve individual autonomy and value identification. They also place the onus of learning, as it should be, on the students rather than on their parents.

Moral striving and contributing to the common good are also non-competitive and less dependent on family background, bringing us closer to a fair society, where everyone can make good, regardless of socioeconomic status.

This is in contrast with technical competencies, which are also important, but where not everyone can be a top achiever. By logical implication, the flip side of acknowledging that every child has unique gifts, is that there will be some advantages and talents that not every child possesses.

A broader concept of merit that is more within everyone’s reach can lower stress, improve mental health and embolden individuals to pursue personal interests and strengths. It also promotes proper societal functioning through greater belonging, cohesion, and increased propensity to take calculated risks.

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Arriving at a social consensus

If a decisive shift in parenting culture is to happen, a social consensus is needed. What can help accelerate this process is to increase recognition of the trend towards a softer approach to child development, in which families increasingly care about character and socio-emotional development, and where building environments of support, trust and openness is prioritised.

If such a consensus is reached, parents will not feel compelled to enter the educational race at the expense of their children’s well-being, just because they mistakenly think that’s what everyone else is also doing.

By shifting the bar for merit in the classroom from achievement for personal gain to include contributions to the community, we make it something which everyone, not just the few, can reach.

Tan Poh Lin is a senior research fellow at the Institute of Policy Studies, Lee Kuan Yew School of Public Policy, National University of Singapore.

get that spot before o level result

SINGAPORE – When Hemavarshnee Saravanan was in Secondary 4, she started a hair accessories business with a friend to sell scrunchies in school-approved colours.

“Students want to look as cute as possible, but it was hard to do that with school rules. So we decided to sell white or green hair ties to give students more options instead of just using black rubber bands,” says the former St Margaret’s Secondary student.

The hair accessories business lasted just 10 months until she had to prepare for her O-level exams. But it sealed her decision to study business and apply to Ngee Ann Polytechnic (NP) via the early admissions exercise (EAE).

“Since I already knew I wanted to get into a business course, I might as well secure a place through the EAE,” says the 19-year-old. She is now a third-year diploma student in business studies.

The EAE is an aptitude-based admissions exercise that allows students to apply for and receive conditional admission offers to polytechnics before receiving their final grades.

According to the Ministry of Education, applications and admissions via the polytechnic EAE have remained relatively consistent over the past three years. About 13,500 students applied for the polytechnic EAE in 2023 for admission in 2024, and 5,500 received an offer.

The EAE is open to graduating O-Level students, final-year Nitec and Higher Nitec students from the Institute of Technical Education (ITE). Polytechnics have the flexibility to select and admit students based on their aptitude and interest.

For more information on the EAE, go to eae.polytechnic.edu.sg or check out the websites of the polytechnics.

Lasalle College of the Arts is offering this admission route for the first time in 2024 for all 11 of its diploma programmes for the August 2025 intake. The programmes include diplomas in fine arts, design, media arts and performing arts. Applications close on May 24.

The Nanyang Academy of Fine Arts (Nafa) also accepts students via EAE. More information is available on the websites of the two arts institutions.

How to boost your chances through write-ups and interviews

The EAE is a holistic assessment of what an applicant has done so far. This means students should go the extra mile and find opportunities and activities related to their field to be considered favourably, says Ms Jeanne Liew, principal of Republic Polytechnic (RP).

She adds that the EAE route is suitable for students who know their interests or what they want to pursue as their career.

“They must possess the passion, aptitude and positive attitude towards a field related to their desired polytechnic course,” says Ms Liew.

She adds that in the last three years, RP has seen a year-on-year increase in the total number of O-level applicants who put RP as their first choice.

The application consists of two components: a 600-character course-specific write-up to assess the applicant’s aptitude and interest for his or her selected course, and an optional 1,000-character write-up about one’s talents and achievements.

Ms Liew strongly encourages students to do the optional write-up.

“Showcase non-academic achievements to boost one’s chances. This could include leadership roles, community involvement programmes, national awards, businesses or an IT programme that they have developed,” she says.

NP’s deputy principal, Ms Looi Mei Fong, advises students to approach both write-ups as if they were pitches.

“The stronger the evidence presented, the easier it is for us to shortlist the applicant for an interview,” she says.

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Students shortlisted for an interview would need to prepare a portfolio showcasing relevant works, certificates or documents.

They should also familiarise themselves with the assessment criteria and stay updated on industry trends. For example, if a child is keen on a diploma in information technology, he can read up news on artificial intelligence (AI), generative AI or careers in the information and communications technology industry.

“This will allow him to engage in a meaningful conversation with his interviewers,” says Ms Looi.

The assessment modes could range from taking an aptitude test to delivering an individual pitch to a group interview to assess teamwork or emotional intelligence.

They may need to respond to scenario-based questions or complete an activity to demonstrate their analytical, critical thinking and communication skills, as well as their awareness of current affairs.

For instance, applicants for the diploma in biomedical science may encounter questions that give them the opportunity to discuss research in diseases and drugs that have been in the news.

“While students will not be expected to have technical knowledge, those who are able to discuss such news with confidence are more likely to stand out,” says Ms Looi.

Mr Sng Choon Leng, director of academic affairs at Temasek Polytechnic, says interviewers are keen to find out about applicants’ interest in a course and how they had pursued this passion.

For example, students could share if they had read up on related topics, participated in training courses, or done some part-time work or community service.

RP’s Ms Liew adds: “Don’t be shy to share about past events and activities that you participated in.”

Miss Jolene Chong, 20, graduated in May with a diploma in applied AI and analytics from Nanyang Polytechnic (NYP). She shared during the EAE interview that she was involved in freelance work during her secondary school days, developing websites from scratch for clients from a job portal.

Miss Jolene Chong, 20, who graduated in May with a diploma in applied AI and analytics from Nanyang Polytechnic, entered the institution through the early admissions exercise. PHOTO: NANYANG POLYTECHNIC

“It gave me something else to talk about beyond my leadership experience, and also showed my interest in the field,” she says.

Her preparations for the interview paid off.

“I asked about one of the projects that the school was developing and the interviewers seemed impressed,” adds Ms Chong.

She topped her diploma programme with a 4.0 GPA and will be studying computer science at the National University of Singapore.

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How parents can guide their child

Parents play an important role in helping their children discover and nurture their aptitudes and passions, says Mr Wee Hau Yap, acting director at the department of academic services at Singapore Polytechnic.

He encourages parents to familiarise themselves with the EAE process, eligibility criteria and available courses to better advise their child.

Parents can also initiate conversations with their child to help him or her discover which way he or she learns best.

Mr Russell Chan, principal of NYP, says parents should ask if their child prefers applied learning or theoretical learning, which is the key difference between a polytechnic and junior college education.

He also suggests that they attend the parents’ seminars held by polytechnics.

“Every polytechnic has its unique selling point and culture. Visit them to experience the feel of the institution and various schools within, and ask questions about the syllabus, teaching model and culture,” says Mr Chan.

He added that four out of the eight NYP Distinguished Award winners at the 2024 graduation ceremonies joined the polytechnic through the EAE.

At NP, five out of the 10 top graduates in 2024 entered via the EAE.

NP’s Ms Looi says parents could consider if their child has the right skills and inner drive to succeed.

“Delve deeper into your child’s motivations, as this will sustain them on their journey towards their dream careers,” she adds.

If a child already has an idea of what he or she wants to pursue, parents can help him or her narrow down his or her options and match them to specific diploma courses.

Ms Looi says it is important to look beyond the course names, to read the course descriptions and module details, and to understand how they will learn.

“Some courses offer a project-based curriculum, while others provide longer, real-world experiences outside of campus,” she says.

Mr Nur Aziman Rostam, 23, entered RP through the EAE and recently graduated with a diploma in sport coaching. He had the chance to do a six-month internship as an assistant football coach from October 2023 at the Bangkok FC Academy in Thailand.

Mr Nur Aziman Rostam guiding a young trainee during his assistant football coach internship at the Bangkok FC Academy in Thailand. PHOTO: COURTESY OF NUR AZIMAN ROSTAM

“Coaching in Bangkok was a very enjoyable experience and I learnt a lot from international coaches about planning each training session,” he says.

He credits his father, Mr Rostam Mohd Hashim, 56, a driver, for introducing him to a variety of sports since he was young.

“My dad triggered my love for sports. I started with soccer, then badminton and canoeing,” said Mr Aziman, who represented Singapore in handball at the SEA Games and Asian Men’s Handball Championship.

He studied fitness training and sport management at ITE before his mentor at the school suggested that he apply to RP.

Despite his busy schedule of studies, part-time work and national handball team duties the past few years, Mr Aziman says he is excited to move closer to his dream of becoming a handball coach.

Mr Nur Aziman Rostam (centre, foreground) taking part in the Men’s Handball Competition at the 2022 SEA Games in Vietnam. PHOTO: NUR AZIMAN ROSTAM

Currently waiting for national service enlistment, he says: “Training six times a week was tiring, but I told myself to trust the process and work towards my goal.”

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