More Than Half of Hong Kong Consumers Express Optimism About Their Household Financial Outlook for 2025
- 44% of consumers anticipated an income increase over the next 12 months, most notably among Millennials
- One-third (33%) of consumers expected an increase in discretionary spending in the next three months as the holiday season approaches
- 84% believed access to credit is important for achieving financial goals, and an improved 54% reported having sufficient access to credit
- However, more than one-quarter (27%) said they did not monitor their credit reports, highlighting the need for greater consumer education
Global information and insights company and Hong Kong’s leading credit reference agency, TransUnion (NYSE: TRU), today released its Consumer Pulse Study for Q4 2024, which revealed that more than half (52%) of Hong Kong consumers were optimistic about their household finances in the next 12 months – the highest rate in 2024. The majority (44%) of consumers anticipated an income rise, most notably among Millennials (rising from 40% last year to 51%), with 42% of consumers saying that they expected income stability in the next year. The study also showed that proactive credit monitoring will be crucial for empowering Hong Kong consumers to manage their credit health, as awareness of the importance of credit and improved access to it both grow.
Increased optimism for household financial outlook fuelled by income gains
In the latest study, over one-third (34%) of Hong Kong consumers in Q4 2024 reported an increase in household income over the last three months. Notably, Gen Z led this trend among the four surveyed generations (Gen Z, Millennials, Gen X, and Baby Boomers)[1], with nearly half (49%) of them reporting income gains, the highest of any group despite a decrease from last year (57% in Q4 2023). Millennials showed significant improvement with 40% disclosing an income increase, marking the highest percentage since Q4 2023. Building on the positive trend of income increases reported last quarter, over half (52%) of the respondents indicated that their income levels remained unchanged in Q4 2024, suggesting a stable income for the majority.
Consumers’ outlook remained upbeat, with 86% anticipating their income to increase or to remain stable over the next 12 months. This confidence is particularly pronounced among younger generations, suggesting a positive shift in their financial situations. Specifically, 51% of Millennials expected a boost in their earnings, a significant increase from 40% at the same time last year. Moreover, more than half (53%) of Gen Z expected an income increase as well, although this figure is lower (68% in Q4 2023) year-over-year (YoY).
Riding on these positive trends in income and anticipated future earnings, around 52% of consumers expressed optimism about their household financial outlook for the upcoming year, up from 46% in Q4 2023. This shift is likely influenced by the improved performance of the local stock market, heightened economic activities and an interest rate cut by the Hong Kong Monetary Authority (HKMA) in September 2024[2], which may have helped ease financial burdens. Additionally, this positivity could also be attributed to consumers’ enhanced capabilities in managing current financial obligations as 80% of consumers expected to be able to pay their current bills and loans in full, an improvement from the 74% who said the same last year.
Sustained consumption confidence throughout upcoming holiday seasons
Despite a growing optimism about future earnings and financial outlook, consumers indicated they have strategically adjusted their household budget to safeguard their financial health amid potential economic challenges, such as inflation and job insecurity (57% and 54% cited these as their top three household finances concerns respectively). While a significant 41% remained cautious about making large purchases, it’s noteworthy that one-third (33%) of consumers anticipated increasing their discretionary spending on dining, travel and entertainment in the next three months as the festive holiday season approaches. This reflects the ongoing consumption confidence among Hong Kong consumers towards the traditional year-end retail peak.
“Our latest Consumer Pulse Study for Q4 2024 reveals an encouraging outlook on household financial dynamics in Hong Kong. With positive trends in income and future earnings anticipated, there is an increasing sense of optimism regarding financial stability, especially among younger generations. As 2024 draws to an end, Hong Kong consumers are planning to increase their spending on dining and travel while also actively prioritising other prudent measures to ensure financial resilience. This forward-thinking mindset is a promising sign for the market as we head into the new year," said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion.
Credit monitoring vital amid improving credit perceptions and growing confidence in credit access
The Q4 study also highlighted encouraging trends in consumer awareness of the importance of credit access and lending products. Not only did 84% of consumers acknowledge the importance of having access to credit and lending products in achieving their financial goals, but perception also improved, with 54% of consumers feeling they had sufficient credit access, marking a seven-percentage point jump from last year.
Notably, two-thirds (67%) of Gen Z respondents believed they had adequate access and 75% were confident their credit application would be approved if needed. More than half (57%) of Millennials believed they had adequate access, while 71% were confident that their credit would be approved. Among those seeking new credit in Q4 2024, credit cards emerged as the top choice at 41%, followed by personal loans at 26% and buy now pay later payment services (known as interest-free instalment payment plans in Hong Kong), at 25%.
With these positive signs of credit recognition, perception and accessibility, effective management of credit health becomes imperative. While a majority of consumers (80%) acknowledged the importance of monitoring their credit reports, more than one quarter (27%) said that they did not monitor their credit reports at all. This lack of vigilance might be concerning particularly for the younger generations who have shorter credit histories and less experience in long-term credit health management.
“Actively managing credit health and monitoring credit reports are foundational to accessing credit and lending products. It is clear that improving education about credit monitoring is essential for enhancing financial literacy among consumers in Hong Kong,” said Sun. “While we encourage consumers to monitor their report regularly, the Credit Data Smart (CDS) initiative, implemented by the Industry Associations[3], allows each consumer to receive a free credit report from TransUnion once every 12 months. We believe this is a good starting point for consumers to build a regular credit monitoring habit, ultimately empowering them to achieve important life goals by unlocking more opportunities via responsible access to credit.”
TransUnion’s Q4 2024 Consumer Pulse Study consisted of a survey of 1,000 adults 18 years of age and older residing in Hong Kong between 25 September and 5 October 2024. This quarterly study examines shifting consumer attitudes and behaviours based on the dynamics of income, debt, and identity theft. For more information, please view the full Consumer Pulse Study Q4 2024 report.
