KRI: Malaysia's Poorest Households Now Keep Under 2% of Income After Spending

Malaysian paycheques have bounced back since the pandemic, but for families at the bottom of the income ladder, almost nothing is left over at the end of the month. That is one of the sharpest findings in a new report from the Khazanah Research Institute (KRI), titled From Income to Wellbeing: The State of Households 2026, as reported by Malay Mail on Friday, 23 October 2026.

Overall, KRI says Malaysians can still be classified as "happy", and wages have climbed back above pre-Covid-19 levels. The trouble is that costs have climbed too, and not evenly.

The headline numbers

Here is what the report found, based on what has been published so far:

• Median household income: RM7,017 a month in 2024.
• Labour force participation: 70.6% in 2024.
• Spending growth: household expenditure rose by more than 15% between 2019 and 2024 for the bottom 70% of households, while spending among the top 10% barely moved.
• Poverty by district: 111 of Malaysia's 166 districts had poverty rates above the national rate of 5.1%, and in 66 districts the rate was more than double the national figure.
• Where people live: 46.2% of households are found in just 22 districts, which an earlier KRI paper reported are the only districts with a median household income above the national RM7,017.

A shrinking safety cushion

The most worrying figure concerns the bottom 10% of households, often called the B10. KRI measured how much of their gross income was left after covering day-to-day consumption.

"Households in the bottom 10 per cent of the income distribution retained only 1.9 per cent of their gross incomes after covering their consumption expenses, down from 10.8 per cent in 2019." (Khazanah Research Institute, as quoted by Malay Mail)

KRI noted that this measure of residual income does not take into account tax payments, loan repayments or money sent to other households. In other words, once those are paid, the real buffer for many low-income families is likely to be thinner still, or gone entirely.

In short, wages are rising, but for lower-income families the extra money is being swallowed by the cost of food, transport, housing and other basics, leaving little room to save or absorb a shock like a medical bill or a broken motorcycle.

Gaps between places, not just people

The report also highlights how unevenly prosperity is spread across the map. Economic activity and population remain concentrated in a small number of urban districts, while many others lag behind on income and have higher poverty rates. That matters for policy, because a single national average can hide very different realities in, say, the Klang Valley compared with rural districts in the east and in Borneo.

What this means for Malaysian readers

For households, the takeaway is that rising pay alone has not guaranteed more breathing room, so tracking where the money goes each month is more important than ever. For business owners, especially those selling to everyday consumers, the report is a reminder that a large share of customers are extremely price sensitive and have very little spare cash. Clear pricing, smaller pack sizes or entry-level options, flexible payment methods and genuine value for money are likely to win more loyalty than premium upsells. Businesses outside the big cities may also find that customers in their area face very different budgets from the national averages they read about in the news.

Sources: Malay Mail, "Malaysians remain 'happy' as wages recover post Covid-19, but rising costs squeeze poorer households, says KRI", 23 October 2026, and Berita Harian, "Baki purata pendapatan isi rumah B10 hanya RM41 selepas ambil kira perbelanjaan", 3 October 2026. Rewritten in our own words.