Offering ‘Bank of Mum and Dad’ to their children eats into Hongkongers’ pension plans
A global survey reveals some 60 per cent of Hong Kong parents are still doling out their hard-earned cash in some shape or form to offspring well into their 30s
“Raise a child to prepare for old age”, as an old Chinese saying goes.
But the reality may now not be as clear cut. A new HSBC global survey shows that many parents here still find themselves needing to pay their offspring’s expenses well into their 30s, spoiling many a leisurely retirement plan.
In Hong Kong, it found that 47 per cent of respondents admitted to financially supporting their children at 18 years old. Perfectly reasonable, you might think.
But 60 per cent of Hongkongers said they are still regularly playing “Bank of Mum and Dad” even after their son or daughter reaches 30 – considerably higher than Asia’s average of 51 per cent.
The survey polled 13,122 people in 13 markets including Argentina, China, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, UAE, Britain and US from March to May this year.
But doling out your hard-earned career savings to grown-up children is certainly not just a Hong Kong phenomenon. In fact, the city isn’t even in the top three when it comes to ongoing amounts and commitments.
An alarming 79 per cent of UAE respondents said they continue to provide financial support after their children turn 18, followed by 77 per cent in Indonesia, and 59 per cent in Mexico.
Globally, half of all respondents admitted to regularly supporting their over-18s financially.
What exactly are these parents still paying for? Just about everything, it seems.
Nineteen per cent, not surprisingly, said it was in the form of helping with buying a first home – probably sensible spending for both sides – but 18 per cent of parents are still paying their grown-up children’s holidays, and nearly half (47 per cent) of Hong Kong parents say they find themselves forking out for their everyday living costs too, such as utility bills, groceries and home repairs.
A third of Hong Kong parents also admitted to having to deal with their children’s medical and dental expenses, while more than half (52 per cent) say the most common outlay continues to be on education.
The report concludes that it’s long past the time of expecting that your offspring will have flown the nest and be finally independent by the time they are 30, and that parents should simply accept them now as a “long-term expenditure”, which needs to be carefully thought out and planned for.
Retirement planning, it adds, has also taken on a whole new meaning, as populations continue to live longer around the world.
Hong Kong men on average now live up to 81.3 years old, while women live up to 87.3 years old, according to Hong Kong government data.
But with dependents also staying on your payroll longer, too, having a child may not be your best option when it comes to planning for your own old age.