Business

Japan's consumers scaling back summer plans amid pension woes, survey shows

Kyodo

Japanese consumers are planning to spend less money during this summer vacation than in any year since at least 2006 amid growing concerns over retirement funding as pension revenues shrink, a survey by a life insurance company showed Friday.

In the survey, conducted by Meiji Yasuda Life Insurance Co., planned spending over the summer vacation this year dropped to ¥68,071 ($640) on average, a decline of ¥15,743 from 2018. The figure is the lowest ever recorded in the 14 years that survey data on the topic has been collected.

Yuichi Kodama, the firm’s chief economist, said of the findings, “People are becoming keen to save money in the medium- and long-term as the topic of how to fund post-retirement life prevails.”

Asked why they plan to spend less this year, 34.6 percent of respondents wanted “to prepare for future spending,” followed by 31.4 percent who intended to deposit the money in savings.

Nearly 30 percent said they will curb spending “ahead of the consumption tax hike” in October.

While the issue of funding post-retirement life typically affects middle-aged and older people, the survey also showed a preference among younger generations to save rather than spend.

Of the respondents in their 20s, 47.4 percent of men and 42.3 percent of women said they plan to save available money.

In keeping with their spending expectations, 56.2 percent of survey respondents said they “will just relax at home” during summer vacation, while 14.6 percent plan to visit parents or relatives and 13.4 percent will travel within Japan.

The insurer conducted the survey online from June 17 to 24, seeking participation from people aged 20 to 59, and received 1,120 responses.