Advertisement
Ageing society
Opinion

Will Hong Kong’s ageing population be financially fit in retirement?

Julio Portalatin says while savings rates are relatively high in the city, and the government is taking steps to help employees, more must be done to avoid a scenario where a large number of elderly can neither contribute to the workforce nor retire comfortably

Reading Time:3 minutes
Why you can trust SCMP
Award-winning Hong Kong athlete Cheung Suet-ling (left) trains with her daughter Lai Yin-mei. Physical fitness has been emphasised at all ages, but fiscal fitness may need prioritisation as society ages. Photo: Dickson Lee
Julio Portalatin

On a recent trip to meet colleagues and clients in Hong Kong, I was struck by the dynamic society and engaged, ambitious workforce making it one of the world’s most prosperous economies. Will the future of Hong Kong’s retirees shine as brightly?

The question is important in today’s landscape, with the spectre of an ageing society looming over us all. Yes, there’s good news in that the people of Hong Kong enjoy relatively high personal savings rates. However, low interest rates have made it difficult to get good returns on savings, while many assets are parked in Hong Kong real estate and bank accounts.
A protester trying to appeal to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor over universal retirement protection struggles with a security guard outside the Legislative Council in Tamar in July. Photo: Xiaomei Chen
A protester trying to appeal to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor over universal retirement protection struggles with a security guard outside the Legislative Council in Tamar in July. Photo: Xiaomei Chen

Hong Kong elderly are badly in need of comprehensive care policy

A little over 20 years from now, there will be one elderly person aged 65 or older for nearly every three people in Hong Kong. That points to a smaller workforce and potential economic slowdown. The cost of living in Hong Kong and its property market inflation have been rising, while health care costs are rising even faster.

Advertisement
This demands action. Fortunately, the government is taking some steps. Launched in April, the Default Investment Strategy improves on the Mandatory Pension Fund scheme, and is a more viable retirement-planning tool for employees.
Elderly residents are seen in Sham Shui Po. Hong Kong’s ageing population has led to many concerns, from a contracting workforce to a sharp decline in the property market. Photo: Felix Wong
Elderly residents are seen in Sham Shui Po. Hong Kong’s ageing population has led to many concerns, from a contracting workforce to a sharp decline in the property market. Photo: Felix Wong

Will an ageing Hong Kong stop the property bull in its tracks?

However, long-term prospects of an ageing population unable to comfortably retire remain – and are not unique to Hong Kong. The World Economic Forum estimates a current retirement savings gap of some US$70 trillion worldwide, topping US$400 trillion for leading pension services by 2050. Here are four ways to change things around:
Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x