For an eighth straight year, the 20 percent of families who have the lowest income in the nation are living in a “negative savings” situation, where their income was lower than expenditures, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said.
These families are living mainly off pension or savings, the agency said, adding that the “negative savings” anomaly is commonly seen in nations with aging populations.
The DGBAS’ most recent poll, which divides the nation into five income categories, with each category representing 1.65 million families, found that those in the lowest level had NT$317,000 (US$9,662) in disposable income per family last year, but expenditures of NT$336,000. They reached minus-NT$19,285 in average annual savings last year
The agency said those numbers reflect the severity of the nation’s aging population crisis and the impoverishment of the working class.
Families in the second-lowest, or fourth, category, did not suffer from “negative savings,” but the survey showed that they did have limited savings abilities as their average disposable income was NT$588,000 while their expenditure was NT$543,000, the agency said.
With average annual savings of just NT$44,233 per year, fourth-category families might not be able to deal with additional expenses that an unforeseen incident could bring, the agency said.
The poll found that there were 8.29 million families with a gross income of NT$10 trillion — the second-highest category — and a 2.74 percent increase in income compared with 2013.
On average, every family received NT$1.21 million in pre-tax income, an increase of 1.52 percent compared with 2013, and would still enjoy a 1.55 percent increase, or NT$957,000 in disposable income after tax, the agency said.
Families in the top category had an average of NT$1.92 million in disposable income, with NT$1.27 million in expenditures, indicating that families in this category had a saving rate as high as 33.77 percent, or NT$648,000 annually, DGBAS said.
The annual amount of savings of high-income families was higher than the annual disposable income of families in the fourth and fifth categories, the agency said.
Families whose heads are 65 years old or older make up half of all low-income families, the agency said, one of the reasons that these families are largely living off pensions or savings.
While it is not appropriate to consider these families as having less income than their expenditures require, the other half of low-income families do have reduced incomes and are facing difficulties in life, the agency said.
Academics said the imbalance in distribution of income, the severity of the “working poor” problem and high retail prices are the prime reasons for the “negative savings” trend, which is putting low-income to middle-class families in a pinch.
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