Singapore Budget 2025: How to maximise benefits for your personal financial planning

The UOB ASEAN Consumer Sentiment Study 2024¹ shows that Singaporeans remain most concerned about rising living costs. Despite lower inflation than the previous year, worries about high prices and increased household expenses persist.

On 18 February 2025, Prime Minister and Minister for Finance, Lawrence Wong, announced comprehensive measures to support Singaporeans at different life stages (Figure 1)².

Here are some ways to take advantage of Budget 2025 benefits, as well as policy changes taking effect from 2025, to boost your personal financial plan.

First jobbers: Lay a strong foundation

1. Budget wisely to build an emergency fund

• Spend SG60 vouchers intentionally to pay for daily necessities like meals.
• Treat savings from SG60 vouchers as a bonus to kick start your emergency fund.
• Automate savings digitally to continue building emergency savings, aiming for three to six months’ worth of living expenses as safety net.

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2. Take advantage of cash bonus for your first insurance or investment plan

• Pool your Assurance Package (AP) cash bonus with existing savings to purchase your first insurance plan or start investing.
• Consider how much from your take-home pay you can continue to put aside for insurance and investment needs before committing.

3. Leverage government benefits for your next social outing

• Keep fit or attend arts and heritage activities with SG60 ActiveSG Credits and SG Culture Pass.

Working adults: Grow wealth and secure stability

1. Maximise SG60 vouchers savings and tax rebates

• Use SG60 vouchers to reduce out-of-pocket expenses for essentials.
• Even though the 60% income tax rebate is capped at SGD200, treat it as a bonus.
• To stretch your dollar, use savings from vouchers and rebates to make cash top-ups to your own or loved ones’ Central Provident Fund (CPF) Special or Retirement Accounts³. You get to enjoy tax reliefs as well as stable long-term returns.

2. Maximise tax savings while growing your retirement nest egg

• From 1 July 2026, the Supplementary Retirement Scheme⁴ (SRS) penalty-free withdrawal age will rise from 63 to 64 together with the statutory retirement age. If you have not, open an SRS account now and make your first contribution to lock in the lower penalty-free withdrawal age.
• SRS allows you to enjoy tax reliefs and save for retirement at the same time.
• SRS savings can be invested, depending on your risk appetite, to work harder to grow your retirement nest egg.

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3. Protect your finances against uncertainty

• MediShield Life premiums are set to increase in stages across all ages from 1 April 2025, together with other enhancements to the scheme⁵.
• While MediShield Life provides a basic safety net, review if your total insurance coverage together with other plans meets your current needs. Secure adequate protection for critical illness, death, and total and permanent disability so that you are prepared when the unforeseen happens.
• Most of all, spend on what you can afford on insurance premiums and avoid overpaying for duplicate coverage.

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4. Boost career resilience with SkillsFuture

• The SkillsFuture Level-Up Programme, launched in 2024 for mid-career Singaporeans 40 years old and above to learn new skills, will be extended to include both full-time and part-time training courses⁶.
• If you lose your job, tap on short-term financial support under the SkillsFuture Jobseeker Support scheme⁷, from April 2024, to undergo training while you search for a new one.
• Upskill with SkillsFuture programmes and credits to stay relevant in your current job or move on to one which is higher in demand to help you stay on track to meet long-term financial goals.

5. Pay down high-interest debt

• Use Assurance Package cash bonus and U-Save Rebates savings to pay down credit card debt or other high-interest loans first to minimise interest payments.

Families: Manage costs & secure the future

1. Maximise Community Development Council (CDC) and SG60 vouchers for daily savings

• Budget your CDC and SG60 vouchers strategically for household necessities like groceries and meals to cut daily expenses.
• Consider pooling SG60 vouchers with family members to make bulk purchases for greater savings or pay for bigger ticket items.

2. Funnel savings from family support benefits towards children’s education needs

• If you have children, LifeSG Credits⁸, top-ups to Edusave or Post-Secondary Education accounts⁹, or Child Development Account (CDA) First Step Grants under the new Large Families Scheme¹⁰ can all help defray everyday expenses like pre-school fees, enrichment classes or learning devices.
• The new Large Family MediSave Grant can be used for a mother’s pregnancy or delivery costs, or your children’s healthcare expenses.
• Savings from these expenses can be allocated to savings plans or investments for your children’s higher education in the future.

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3. Maximise childcare subsidies for lower costs

• Monthly childcare fee caps for government-supported preschools will be further lowered in 2025.
• Childcare fees form a substantial portion of a family’s monthly expenses. Consider switching to government-supported preschools to take advantage of lower monthly fees if you are eligible.

4. Enhance family protection and estate planning

• Review insurance policies to ensure adequate protection for dependents if you are planning for a larger family.
• Update your CPF nominations and will to reflect changes in your family size.

Pre-retirees and retirees: Strengthen retirement security

1. Prepare for medical & long-term care costs

• The new five-year Matched MediSave Scheme (MMSS) will boost MediSave accounts for seniors with lower balances from January 2026¹¹.
• Use Assurance Package cash bonus and savings from U-Save Rebates to make cash top-ups to your MediSave accounts to enjoy the government’s matched savings and boost healthcare savings.
• Even though higher long-term care subsidies and grants were announced in the Budget, consider adding on CareShield Life or ElderShield supplements¹² for higher long-term care coverage, if you can afford higher premiums.

2. Maximise CPF contributions for retirement income

• Total CPF contribution rates will increase by 1.5% for those aged 55 to 65 from 2026¹³.
• To further boost your retirement savings, consider topping-up your CPF Retirement Account¹⁴ to the Enhanced Retirement Sum (ERS) for higher monthly CPF LIFE payouts during retirement.

3. Use SG60 vouchers strategically

• Singaporeans aged 60 and above will receive a higher amount of SGD800. Use it to offset medical bills, daily grocery or transport expenses.
• If you are still working, put aside savings for medical or long-term care needs.

Conclusion

It’s all about making these benefits work harder for you. Boost your financial security, save money, and grow wealth for the future by taking advantage of these new measures. Stay on top of government schemes that match your life stage and tweak your financial plan along the way.

To take your financial journey further, click here for an appointment to speak with a UOB Banker.

Figure 1: Key Budget measures for Singaporeans and Singaporean households

Source: UOB Global Economics & Markets Research, Ministry of Finance

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