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Hong Kong's state-funded pension scheme

Hong Kong’s residents ill-prepared for ravages of old age, new Baptist University study shows

Survey also highlights concerns over ‘troublesome’ process of financial planning, and lack of understanding over enduring power of attorney

PUBLISHED : Sunday, 03 June, 2018, 11:31am
UPDATED : Sunday, 03 June, 2018, 11:31am

More than 75 per cent of Hong Kong residents aged 55 and above have not made adequate provisions for their twilight years, a new study has found.

The survey, by one of the city’s largest charities, showed that three out of four had not made a will, set up a private trust, or established an enduring power of attorney should something go wrong.

Commissioned by the Tung Wah Group of Hospitals, the Centre for the Advancement of Social Sciences Research at the Baptist University polled 526 local individuals aged 55 and above last September.

All of those surveyed – or their spouses – had assets of more than HK$500,000, however, 48 per cent said they did not know how to manage those assets, or found the process too “troublesome”.

In the face of difficulties with money matters, more than 40 per cent said they would seek help from their children, while fewer than 29 per cent said they would handle the problem on their own.

Worryingly, 84 per cent of those surveyed said they did not know what an enduring power of attorney was. The power of attorney allows one person to act for another in the event they become mentally incapacitated.

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Low Chen-yang, assistant community services secretary of Tung Wah, said the high cost of producing an enduring power of attorney was also an important reason behind the low usage rate.

“It can cost between HK$30,000 and HK$70,000, including obtaining the signatures required from lawyers, doctors and donors,” Low said.

Besides suggesting more public eduction on the legal tool, Low also called on the government and social welfare groups to provide cheaper legal services to the elderly, as more than 58 per cent of those surveyed said they hoped for proper management of their money in their old age should they be unable to care for themselves.

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More than 45 per cent said the government should set up a public trust fund to help with financial management.

In the budget for 2018, Financial Secretary Paul Chan Mo-po announced that HK$50 million would be allocated to set up a dedicated office to provide trust services for parents whose children had special needs.

The trust services are expected to be launched by the end of this year.

As for older members of society, the government was set to launch a public annuity scheme in 2019 for people aged 65 and above.

According to official figures, the scheme, which is essentially retirement insurance, would pay the insured a maximum of HK$5,800 a month, if a premium of HK$1 million was paid.