The unpleasant truth about growing old

PUBLISHED : Thursday, 01 March, 2012, 12:00am
UPDATED : Thursday, 01 March, 2012, 12:00am


The news

Well-off retirees are being offered homes for the rest of their lives in two upmarket housing projects in Hong Kong. Those taking up the offer will pay one-off lump sum rent payments starting at about HK$3 million.

The Hong Kong Housing Society is targeting people aged 60 and above for its 'joyous living' projects in North Point's Tanner Hill and Tin Shui Wai. The homes will come with access to a wellness centre, a day care centre, a nursing home and services from laundry to travel-ticket booking and airport pick-ups. The society is working out pricing arrangements for tenants, but preliminary plans suggest that an applicant will pay a lump sum of several million dollars for a lifelong lease, along with a monthly management fee.

'Many who have so far expressed interest in the projects are retirees who emigrated to countries like Canada before 1997,' society chairman Yeung Ka-sing said. 'Their children have grown up and moved away to find work. They want to come back, but find home prices unaffordable. There are no tailor-made flats for the elderly in the private market, apart from subsidised rental homes and care centres. Our projects fill the gap.'

Both sites will provide homes of 500sq ft to 1,300sq ft for long-term lease, not for sale. The Tanner Hill project will yield 588 flats by 2015, and the site near the wetland park in Tin Shui Wai will deliver 1,000 flats by 2016.

The older the tenants, the lower the lump sum rent they will have to pay. If a person moves out or dies earlier than projected, some form of payment may be returned.

This is an edited version of an article which appeared in the South China Morning Post on February 8

The issues

While older people who are well-off have more than one choice for a happy retirement, life remains miserable for the majority of Hong Kong's elderly. According to the Council of Social Service, some 290,000 people aged 65 or above, or about one in every three elderly people, are struggling with poverty. Single people are living on an average of HK$3,450 a month, less than half the city's median household income. The government seems reluctant to commit to any long-term elderly welfare schemes. The HK$1,090 old-age allowance, or 'fruit money', is pretty much the only long-term assistance that everyone above the age of 70 is able to get without having to go through any means tests. This is by no means generous compared to other developed countries.Singapore

In Singapore, the government plans to spend about US$470 million annually for the next five years to subsidise the hiring of workers aged 50 and over and to provide various subsidies for low-income and elderly households.

'The government will provide cash, utilities rebates and a contribution to the medical component of the pension fund annually for the elderly and low-income households,' said Finance Minister Tharman Shanmugaratnam in his budget speech on February 17. 'The administration will set aside S$3.6 billion [HK$22.2 billion] to fund the initiative over the next five years. The annual health care expenditure will be doubled to S$8 billion over the next five years to add hospital beds and increase subsidies for nursing homes.'


In Australia, the Age Pension is issued to women above 60 and men above 65. Applicants have to go through an income and assets test to work out the amount they receive. A single person can receive a maximum allowance of A$689 (HK$5,718) per fortnight, while couples can obtain a maximum of A$519.40 each.


Facing a public outcry that the government is not willing to commit to long-term welfare for the elderly, the two chief executive candidates have each promised to do more.

Leung Chun-ying proposed spending HK$3.2 billion on a means-tested old-age allowance, plus HK$300 million for HK$1,000 medical vouchers.

Henry Tang Ying-yen suggested a monthly HK$3,000 retirement subsidy for senior citizens, and said he was confident the government would be able to afford the additional annual expenditure of HK$6.6 billion.

This is good news, but how long the elderly have to wait before plans materialise remains to be seen. Poor planning

In Chinese culture, the elderly traditionally rely on filial financial support. A survey released last year by HSBC Group and the University of Hong Kong found that 63 per cent of retirees received financial support from their children. But this long-standing family support system is unravelling as social attitudes change, divorce rates rise and households shrink.

Most financial experts agree that one thing leading to less comfortable retirements is a lack of planning. They say people start planning for retirement too late, do not save enough, and have no defined targets or goals. Without goals, they get confused and this leads to saving inactivity.

Those who do have savings plans can still fall short on their retirement goals because of poor investment choices due to a lack of financial knowledge.

When people are working and contributing to MPF schemes, they tend to forget to adapt the type of investments they have chosen as they get older.

There is a need for employers and MPF scheme providers to offer investment guidance to meet the changing needs of workers and help people create their own target retirement funds.

This report was compiled from information published in the South China Morning Post

Voices: What people are saying

The trend towards smaller households and the ageing population will further weigh on the already strained public housing and elderly welfare system

Dr Chung Kim-wah, applied social sciences lecturer, Polytechnic University

The 2011 policy address included a pledge to increase residential care places. This would be done by expanding community care services so more elderly could continue living independent lives in the residence of their choice, and by improving the mode of service delivery to cater for the escalating health and social care needs of older people

Professor Diana Lee, director, Nethersole School of Nursing, Chinese University

I have little money so I eat frugally every day, say a salted egg for lunch and cereal for breakfast. That's it. There's nothing I can do. You can't just demand that things happen as you wish

Wong For-tai, 78, who has no savings after a lifetime devoted to caring for her family