Pressure growing on sandwich generation
Asia's sandwich generation - adults 'sandwiched' between the competing demands of caring for their children and parents - will be under increasing financial pressure across the region.
According to a Fidelity International report undertaken by the Economist Intelligence Unit, families in Hong Kong and the mainland will be feeling it the most. 'The lack of fully developed pension schemes in many countries in Asia means the sandwich generation is responding to these pressures at the expense of their long-term financial security and the standard of living they can look forward to in retirement,' says Kerry Ching, Fidelity International's managing director for Hong Kong.
As a result, this group is working harder, saving less and taking fewer risks with investments which, according to Fidelity, could pose a threat to their future financial security and retirement.
Fidelity says this highlights the importance of the MPF as part of an overall portfolio and the 'snowball' effect of compounding investment over time. 'It is also important to note that the biggest challenge service providers are facing now is the relatively low awareness among Hong Kong people about the importance of retirement planning,' says a company spokesman.
Of the 700 people surveyed in seven jurisdictions, 42 per cent expected their standard of living to decrease once they have left the workforce, yet only 16 per cent are seeking any professional financial or insurance advice when making saving and investment decisions for their future.
In terms of savings, the Fidelity Report found that, unlike their counterparts in other parts of the Asia-Pacific region, the mainland's sandwich generation favours the stock market as a savings vehicle.
In Hong Kong, 53 per cent of respondents felt under financial pressure caring for their family. Regionally, 36 per cent admitted they were struggling to cope financially with their family responsibilities.
The working-age populations in Hong Kong and the mainland are also spending more time and money on their families. Education costs are recognised as high across the region - particularly in Hong Kong where school fees were generally seen as higher.
'Despite the financial pressure many people are feeling, there is still a need to focus on saving and investing and, by seeking expert professional advice, people can investigate options that can support them, and their families, now and into the future,' Ching says.