Ageing Hong Kong must ensure quality of life for its elderly, and new annuity scheme ticks many boxes

People aged 65 and above will be able to invest between ­HK$50,000 and HK$1 million under a life annuity scheme to enjoy a 5-7 per cent rate of return, which is better than all existing similar products in the market. It is also very appealing as there is no management fee or surrender charge, and beneficiaries are entitled to 105 per cent of total premiums,less any monthly annuity paid, in case of death.

If you live to be older than 82, you can actually earn more. A projected life table for older adults puts life expectancy for 65-year-olds in 2017 at 20.10 years for males and 24.47 for females. Hence it is anticipated that at least 50 per cent of the elderly can enjoy the extra return due to their long lives.

Hong Kong women penalised for living longer: enquiry into annuity scheme discrimination

Hong Kong is ageing fast, with 14.5 per cent of its population aged 65 or above at present, and this is forecast to increase to about 30 per cent by 2050. Therefore, care and support for older adults has become an important social and public health challenge. Nevertheless, the incoming cohort of older adults would be financially better off than the earlier one.

A risk-free retirement protection scheme would be suitable for this type of population. If our aim is to provide universal retirement protection, we don’t have to insist on the government paying all the costs.

Live long and prosper? Hong Kong’s new annuity scheme a ‘step towards universal pensions’

At present, social services already use up to 16.5 per cent of government expenditure. Due to budget constraints, any universal pension scheme amount will not be enough for those who really need the money; whereas for those who don’t need the money, it would not make much difference to their quality of life whether or not they have the pension.