Mr Choy said the MPF scheme had provided a positive wake-up call because it focused attention on the topic of retirement. However, more needed to be done.

A trend that also concerns Mr Choy is Hong Kong's ageing population. One of the world's most comprehensive studies on global attitudes to ageing and retirement, published earlier this year by HSBC, showed that traditional retirement is a thing of the past for many people. Eighty per cent of respondents said they wanted mandatory retirement to be scrapped while 14 per cent equated financial independence with old age.

Hong Kong now has one of the highest life expectancies in the world.

'The ageing population, declining fertility rates and increasing lifespan are combining to create new challenges for Hong Kong,' Mr Choy said.

Now, 12.1 per cent of Hong Kong's population, or 840,000 people, are considered elderly. In 2033, this figure is expected to rise to 26.8 per cent, or 2.24 million people.

The elderly dependency ratio is also expected to rise from 166 this year to about 428 per 1,000, meaning that there will be about 2.3 people of working age to one elderly person.

With a much smaller working population supporting the growing number of retirees, Hong Kong's population structure will become an inverted pyramid.

Entitled The Future of Retirement, the study examines attitudes in Brazil, Canada, mainland China, Hong Kong, France, India, Japan, Mexico, Britain and the United States - countries which contain more than half of the world's people and combine to give a representative sample of the global population.

Hong Kong respondents differed in their opinions towards retirement from those questioned elsewhere in the world. Hong Kong people do not want to work and do not see work as part of a happy old age.

'Many Hong Kong people do not see retirement as a continuation of what life was,' Mr Choy said.

'For many people, reaching retirement will mean they no longer have a stable income. They will need to address issues such as whether or not they can maintain their standard of living and afford health care.

This reinforces the oft-repeated message that it is never too early to start saving for retirement as this allows more time to build up assets.

Someone in their early 30s can also afford to be aggressive with their investments and choose investment vehicles that offer higher returns accompanied by higher risks.

HSBC has established a comprehensive retirement savings programme designed to form a lifelong relationship with its clients.

Mr Choy suggests that making additional voluntary MPF payments is another way of accruing money for retirement. He said the HSBC survey clearly showed that Hong Kong people were worried about their financial arrangements for retirement, with two-thirds concerned that they would outlive their money. But only a third of those questioned had done their sums on their financial needs and the source of income for their retirement.

Someone looking forward to 30 years of retirement and requiring $15,000 a month in living expenses will need to build up a fund of $3.5 million.

An MPF member aged 35 receiving a salary of $20,000 and paying the basic MPF contribution will have accumulated $1.67 million on reaching 65. Taking into account 2 per cent inflation annually and a 5 per cent return on investment, and, assuming the member lives until he or she is 85, the monthly available cash will be $4,661.

By making an additional voluntary contribution of $1,000 a month, the figure will rise to slightly more than $2.5 million and provide a $6,990 monthly benefit. If the member opts to save an extra $1,500 a month, the fund will rise to $2.92 million and available cash will increase to $8,156 a month.

To encourage increased saving, HSBC offers a programme to give employees more control over their MPF retirement planning through a voluntary contribution scheme. The service enables employees to make additional voluntary contributions to their MPF accounts without any involvement of or additional administration by their employers.

'Voluntary contributions are a straightforward, totally private way of making additional contributions to help build up MPF funds,' Mr Choy said.

'The service is independent of the employer. However, all contributions can be invested in the same spread of funds the member has chosen for the compulsory MPF payments. The service is convenient and helps to encourage a mindset of saving.'

Members can make regular direct contributions starting at $300, or pay a lump sum of $1,000 for hassle-free investing.

Contributors can withdraw personal contributions without any extra handling charges.

Contributors are not allowed to make withdrawals from their mandatory MPF accounts except under special circumstances stipulated in the MPF legislation.

AT A GLANCE

An MPF member aged 35 with a salary of $20,000 and paying the basic MPF contribution will accumulate $1.67 million on reaching 65. With annual inflation of 2 per cent and a 5per cent return on investment, and assuming the member lives until he or she is 85, the monthly available cash will be $4,661.

By making an additional $1,000 voluntary contribution a month the figure rises to slightly more than $2.5 million and provides a $6,990 monthly benefit. If the member opts to save an extra $1,500 a month, the amount accumulated will rise to $2.92 million on retirement, with a monthly cash payout of $8,156.