The richest 20% of households in S’pore have more wealth than the rest of society

MOF’s first deep-dive into inequality since 2015 tracks the richest, how wealth accumulated, and why climbing the ladder is difficult

The latest Singapore Occasional Paper on income growth, inequality and social mobility trends was released by the Ministry of Finance (MOF) on Feb 9.

For the first time, the government is releasing wealth inequality data, where administrative data taken from household surveys are used to derive estimates of wealth distribution in Singapore.

This is the second Occasional Paper to be published, following the first published in Aug 2015.

Here are some of the highlights Vulcan Post found it worth pondering over.

1. S’pore’s top 20 percent hold the average household wealth more than 80% of the population combined

For example, with the latest figures for 2023, for total wealth, the paper reports that the top 20% own an average household wealth of S$5,264,000, in addition to the amount of income. combined the average household wealth of the rest of the 80% at S$3,541,000 (after including the bottom four quintiles).

That’s a whopping 32.7% difference in average household wealth between the top 20 percent and the rest of the population.

Net worth is calculated by taking the difference between total assets (net worth, total CPF balance and other financial assets) and total liabilities (mortgages and other debts).

However, the MOF notes that these numbers may not be accurate, as “estimates may be prone to under-reporting,” especially for high-net-worth individuals, “which may underestimate wealth”.

2. Singapore’s wealth inequality ‘relative’ to other developed economies

Globally, wealth inequality tends to be higher than income inequality. Singapore is similar, with its Gini coefficient standing at 0.55 (vs 0.38 for income after taxes/transfers) in 2025.

The Gini coefficient is a statistical measure of economic inequality, with a range of 0 (perfect equality) to 1 (extreme inequality), used to analyze income or wealth distribution.

Therefore, Singapore’s wealth inequality is comparable to other developed economies such as the UK, Japan and Germany, which range from 0.6-0.74.

This is due to the HDB and CPF policies, which act as the main managers of wealth inequality by supporting families, especially low income, to achieve home ownership and accumulate retirement savings.

The report also revealed that the majority of Singaporean households hold good wealth, unlike countries such as the UK/Australia, where the bottom 20% have zero or no home equity.

In Singapore, home equity makes up more than half of the wealth of even less than 20% of Singaporean households.

3. Social mobility remains strong, but shows the first signs of moderation

Most Singaporeans have experienced rising incomes over generations, and Singapore has done very well in sustaining social mobility compared to other advanced economies.

Furthermore, most Singaporeans earn more than their parents in real terms, consistently across birth cohorts.

Relative mobility is competitive internationally: Children born to fathers in the bottom 20% have a better chance of earning a higher income in adulthood, with 13.8% of them becoming the top 20% earners, compared to the US, UK or Australia.

However, as Singapore’s economy grows, the MOF said maintaining intergenerational mobility will be more difficult, as our social mobility has shown signs of gradual moderation.

The correlation between parent and child income has increased modestly over time, and the share of poor children below 20% has increased—early signs of a slowdown similar to patterns in other advanced economies.

4. Singapore’s tax and transfer system is very progressive

Singapore’s tax and transfer system benefits our low-income families as it should.

The government redistributes resources to support those in greatest need, while keeping taxes low for low- and middle-income households.

Low-income families receive far more benefits than taxes, whether measured by market or employment income.

For every S$1 of taxes paid, the bottom 20% of households receive about S$7 in benefits, while the top 20% receive about S$0.20.

This benefit-to-tax ratio is more favorable to low-income households than in Finland or the UK.

About 35% of Singapore workers pay no personal income tax, while the top 10% of earners pay about 75% of all personal income tax.

The system keeps the overall tax burden low on the middle class while targeting support to those who need it most, ensuring that economic benefits are shared equally across all sections of society, the Government said.

• Read other articles we have written about the Singapore work environment here.
• Read more stories we’ve written about Singapore businesses here.

Featured Image Credit: Andrzej Rostek via Shutterstock