PAP Member of Parliament C. V. Devan Nair was appointed the third President of Singapore on 23 October 1981, vacating the Anson seat for a by-election for the third time in the constituency's history. WP leader J. B. Jeyaretnam and a SDP candidate accompanied by party leader Chiam See Tong both turned up at the nomination centre. Chiam pulled out his candidate after a discussion with Jeyaretnam and WP leaders to avert a three-corner clash. However, UPF leader Harbans Singh entered the fray. Jeyaretnam's victory marked the end of PAP's 15-year monopoly since BS boycott of Parliament in 1966 and WP's return to the legislature after 20 years since 1961 in the same seat that David Marshall, then WP chairman, had clinched.

Writ of election: 14 October 1981 [Wed]
Nomination day: 21 October 1981 [Wed]
Polling day: 31 October 1981 [Sat]
Member swearing-in: 22 December 1981 [Tue]

Eligible voters: 14,512
Voter turnout: 13,746 (94.7%)

Election deposit: $1,500

Total seats = 1