21/07/2025

MONDAY | JULY 21, 2025

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M40 families face new struggles

o Once backbone of economy, middle-income earners say financial footing slipping, with mounting pressure from impact of rising costs and shrinking savings

services, gym memberships and scaled back her children’s extracurriculars. Her grocery strategy now hinges on timing. “After 7pm, meat and vegetables are usually discounted, so I buy in bulk and freeze them,” she said. Earlier this year, she had to use her credit card for her son’s dental procedure, and later she took out a personal loan for urgent home repairs. “There’s no buffer anymore. One big bill, and we’re in trouble.” Her biggest fear now is a medical emergency. “Just because we earn a little more than the B40 doesn’t mean we’re not struggling. “Help should be based on how people actually live, not just gross income. We’re not asking for handouts but just fairness.” As SST-driven prices ripple across the economy, many M40 families are quietly slipping into survival mode, trading comfort for caution, plans for panic and stability for silent sacrifice.

feels similar pressure, despite living in a semi-urban setting. “It’s slightly cheaper here than in KL, but raising four kids is still expensive, even with both of us working full-time,” he said. He and his wife spend about RM2,500 a month on childcare – relying on babysitters and van services to coordinate their children’s daily routines. Once a promising youth footballer, Mohamad Firdaus left competitive sports behind for the security of a teaching career. He doesn’t regret the choice but it hasn’t shielded him from stress. “We’re not struggling day to day, but one unexpected bill like a car breakdown or a medical emergency could derail our whole month.” For Izzati Abdul Rahman, 45, the financial shift has been even more drastic. “Five years ago, I could save, invest and take my kids on holidays. Now we’re living paycheck to paycheck,” she said. Izzati has cancelled streaming

Ű BY HARITH KAMAL newsdesk@thesundaily.com

nets. Between a housing loan, car payments and student debt, his single income barely stretches beyond monthly commitments. “I used to have some room to save or invest, but now I plan around survival. “Streaming, online shopping – all that’s cut. I’m just trying to get through the month.” “Some months I delay loan payments just to keep things afloat. It’s not ideal, but I don’t have a choice.” He believes policies should reflect the new reality, especially for the young ones. “Freeze SST on essentials. Give tax relief for student loans. Just something to help people like us.” In Kepala Batas, Penang, teacher Mohamad Firdaus Ab Rahman, 36,

Some of that, he admits, is due to his growing children. But the financial strain has become constant. He said family dinners are now a rare treat. His daughter’s piano lessons were the first to go. School holiday trips have turned into quick mall outings. Although they are managing, Kamarrul said their savings are dwindling fast. “Car repairs, school supplies – we’ve dipped into our savings more than once this year. “The government helps the B40, and that’s important. But we’re slipping too. “Some tax breaks or fuel subsidies would go a long way. Right now, we’re on our own.” Ray (not his real name), 33, is in a similar boat but with fewer safety

PETALING JAYA: Once seen as the engine of Malaysia’s economy, the M40 or middle-income group is now fighting to stay afloat – squeezed by rising living costs, stagnant wages and the expanded Sales and Service Tax (SST). For 37-year-old Mohd Kamarrul, providing for a family of four now means holding down two jobs. By day, he works full-time in an office. At night and on weekends, he delivers food or helps at events to make ends meet. “Groceries and utility bills are eating up a bigger chunk now. “We used to spend around RM1,100 on groceries each month. Now it’s RM1,500 or more.”

Fomca calls for major policy shift PETALING JAYA: Malaysia’s middle class is being squeezed out of national policymaking, despite bearing the brunt of rising costs and shrinking financial buffers, says the Federation of Malaysian Consumers Associations (Fomca). Fomca chief operating officer Nur Asyikin Aminuddin said while public aid and subsidies are typically directed at the B40 group, the M40 – those earning between RM5,000 and RM10,000 monthly – are increasingly caught in a financial bind. The middle class is battling inflation, rising living costs and fading financial safety nets. “They’re too ‘rich’ for aid but not rich enough to withstand economic shocks. Maintaining a decent standard of living in urban areas is increasingly difficult.” One alarming trend, she noted, is the rising number of families surrendering or letting health insurance policies lapse. “Premiums have become unaffordable as basic needs take precedence. Any emergency – illness, retrenchment – leads to cost-cutting and insurance is often the first to go. “With private healthcare costs rising, insurance is no longer a luxury but a necessity. Yet, many are underinsured or uninsured, forced to rely entirely on the overstretched public system.” Childcare and housing, she added, are critical pressure points.

‘Progressive tax relief, emotional support networks for group’ PETALING JAYA: Experts warn that if current conditions persist, more M40 households may soon slip into the B40 group. Universiti Teknologi Mara senior lecturer in economics Dr Mohamad Idham Md Razak said some middle-income earners are no longer living the lifestyle typically associated with the M40, despite technically qualifying by income. “They may not be able to maintain their lifestyle, and in reality, are living as B40s. It’s especially true in urban areas where the cost of living is higher. The so-called M40 are effectively the urban B40.” He warned that the shrinking middle class threatens broader economic stability. “The M40 are a key driver of domestic consumption, which fuels the gross domestic product. If they cannot save, invest or spend, sectors like retail, property and services will be hit. Small and medium enterprises (SMEs) and tax revenue will also feel the strain.” Mohamad Idham said Malaysia’s B40–M40–T20 income model no longer reflects lived realities. “Over the past decade, essentials like housing, healthcare and education have outpaced wage growth. Families are dipping into savings, taking on debt or delaying life goals. The impact goes beyond money.” University of Nottingham Malaysia Assoc Prof Dr Siti Khadijah Zainal Badri said prolonged financial stress is taking a heavy emotional toll. “Financial burden affects entire families. It can lead to mental health issues, marital strain and in some cases, neglect or abuse.” Siti Khadijah said in Malaysia’s collectivist culture, financial struggles often go unspoken due to stigma. To address the challenges, both experts urged a mix of economic and emotional support. Mohamad Idham proposed progressive tax relief, subsidies for childcare and education and shifting financial aid eligibility from gross income to disposable income. He also called for stronger social safety nets, including affordable housing and unemployment protection. Siti Khadijah stressed the need to destigmatise mental health and expand accessible services. “We must normalise conversations about financial struggle. Have grassroots emotional support networks. “People need to know they’re not alone. Shared support helps rebuild emotional resilience.” – by HARITH KAMAL

M40 and T20 – to a more nuanced, needs based framework. Specifically, it urges the adoption of the Reasonable Basic Living Expenses (Perbelanjaan Asas Kehidupan Wajar or PAKW) tool, developed by the Statistics Department. “PAKW calculates household well-being based on actual spending needed for a dignified life, including food, housing, healthcare, transport and childcare, not just income. “It adjusts for location, family size and life stage, offering a clearer picture of who truly needs support.” Nur Asyikin said wider PAKW adoption across ministries could make social programmes more effective, especially for urban, middle-income households. Fomca also recommends breaking down the M40 into lower and upper tiers and publishing regional PAKW data for more localised policymaking. “There is a growing class of ‘invisible poor’ within the M40 who don’t show up in statistics simply because their income sits just above the cut-off. “The government must realise that well being isn’t just about surviving, it’s about helping families live with dignity.” – by HARITH KAMAL

“Their commitments – housing loans, education, insurance and care for ageing parents aren’t factored into current income-based assessments. They’re trapped in survival mode.” Nur Asyikin said Fomca has received more complaints from M40 households, especially since the Sales and Service Tax (SST) was raised to 8%. She said it has driven up service costs in logistics, repairs and professional fees – putting further pressure on household budgets. “M40 families are facing higher prices on essentials like food, transport and utilities.

“In urban areas, early education and daycare can consume 30% to 40% of household income. Some parents cut working hours or rely on unregulated caregivers, affecting both income and child development.” As for housing, many so-called “affordable” homes fall short, said Nur Asyikin. “People think they’re buying stability, but end up in buildings with broken lifts or overcrowding. Home ownership should come with dignity and safety, not just a roof.” Fomca is calling for a major policy shift – away from rigid income categories like B40,

TRADITION ON STAGE ... Cultural dancers perform at the Indigenous Arts Festival Pahang 2025 at Dataran Temerloh, showcasing the rich heritage of communities of Sabah and Sarawak. – BERNAMAPIC three-day Malaysian