The maximum investment stands at HK$1 million (US$127,412), with a minimum of HK$50,000. Given that women tend to live longer than men, they will get a monthly return on the maximum investment of HK$5,300 (men get HK$5,800), which means that if the investor survives for more than 15 years, they can start earning real money on their investment.

Life expectancy in Hong Kong is unusually long compared with other places; currently, the average life expectancy for men is 84 years and 87 for women.

Therefore, if a 65-year-old were to invest this month, the “profits” of this annuity scheme would start kicking in when they reach 80. Thus, on the basis of average mortality rates, a man who lives until the age of 84 would receive HK$278,400 more than he invested over the additional four years, meaning a gain of just over 25 per cent on his original investment. Or, to put it another way, this is equivalent to an average annual interest rate of 1.6 per cent.

Obviously, not all those taking part in the scheme will be precisely 65; most will be older, so their chances of surviving beyond the point where “profit” kicks in are considerably reduced.

Then there’s the question of how much a monthly payment of HK$5,800 would be worth in inflation-adjusted terms in 15 years. It’s anyone’s guess but it is staggeringly unlikely that there will be a decade and a half of zero inflation so that even investors who survive long enough to take a “profit” will most probably see the gain eaten away by inflation.

Practically any other long-term investment, even in boring old bonds, should yield a much higher return. Indeed, history shows that equity investors – even those solely concentrating on blue chip stocks, are more or less certain to achieve an annual yield exceeding 1.6 per cent over a 15-year period.

In addition, investors in both equities and bonds receive dividends and can make a profit from selling their investment at any time. Government annuity holders will not even get their original investment back and, if they choose to surrender their polices, will have to pay a penalty for doing so.

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Those attracted by this scheme will have to pay a great deal for security. They know that the government is highly unlikely to default or disappear and they like the idea that, even in bad times, their monthly payments are guaranteed.

They will probably be less enthusiastic about this fixed sum if Hong Kong embarks on a period of extreme inflation, which will have the effect of reducing the value of their monthly payments.

However, there is something to be said for peace of mind and simplicity, both of which are offered by this annuity scheme.

What the scheme does not address is the very grave problem of old age poverty; currently, more than 31 per cent of the population aged over 65 is living below the poverty line.

Then there’s the matter of the ageing population. As matters stand, roughly 18 per cent of the total population, or 1.3 million people, are aged over 65. That figure is expected to rise to 31 per cent in just 18 years.

If the government has a master plan for tackling this rapidly approaching demographic earthquake, it has managed to keep it well under wraps. While officials remain steadfast in their resistance to the introduction of a comprehensive social security system, they have made some piecemeal attempts to tackle this looming problem.

Stephen Vines runs companies in the food sector and moonlights as a journalist and a broadcaster