Poor response to Hong Kong government’s annuity scheme as senior citizens subscribe to less than 50pc of US$1.27b target

The response to the Hong Kong government’s HK$10 billion (US$1.27 billion) public annuity scheme has been pretty disappointing, with just 9,410 senior citizens intending to invest HK$4.94 billion, less than half the quota, according to the scheme’s operator HKMC Annuity.

“The HK$10 billion was the cap for the scheme and not the sales target,” Edmond Lau Ying-pan, chief executive of HKMC Annuity, said at a press conference to announce the subscriptions details of the programme. “The result was within our expectations. The annuity scheme is new and it takes time to educate the public about the product.”

The average subscription amount for the offer, which ran from mid-July until its close on Wednesday, is HK$525,000. Thirty per cent of the applicants want to invest HK$1 million and 54 per cent HK$500,000 or more. Only 5.5 per cent or 520 senior citizens want to invest HK$50,000 to HK$99,999.

The minimum investment threshold is HK$50,000.

Lau said subscribers have until October to complete their purchases.

While some retirees told the Post they did not buy the scheme as it carried a low return of 4 per cent, Lau said they should understand the scheme is risk free, while other like stock investments carry higher risks.

The Hang Seng Index rose 36 per cent last year, making it one of the best performing stock indices worldwide, but it has had a bumpy ride this year because of the trade war between the US and China.