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‘I can only dream’: annuity scheme either not enough or out of reach for many of Hong Kong’s elderly

Some say it is only a ‘gimmick’ with low return prospects, while others say it is unaffordable

PUBLISHED : Tuesday, 11 April, 2017, 11:24pm
UPDATED : Tuesday, 11 April, 2017, 11:32pm

The Hong Kong government’s HK$10 billion public annuity scheme has received a lukewarm response from the city’s senior citizens, despite promises it will help the elderly “better enjoy the rest of their lives”.

Mak Hon-kai, a retired teacher and president of the Hong Kong Association of Senior Citizens, said while he had more than HK$1 million in savings, the scheme was not attractive.

“You don’t know when you will die,” he said. “It is just another gimmick by the government – like the reverse mortgage scheme and HK$2 transport [concessions] – to mask the fact that there is still no retirement protection for the elderly.”

The Hong Kong government has so much surplus. Why can’t it help the elderly to live with dignity?
Mak Hon-kai

The 78-year-old said the government should instead adopt a non-means-tested universal pension scheme.

“The Hong Kong government has so much surplus. Why can’t it help the elderly to live with dignity?” he said.

Mak said his biggest expense every month was business meals for the association, which can cost between HK$8,000 and HK$10,000. And if he invested HK$1 million into the government scheme, he would only receive HK$5,800 per month, which does not cover his expenses.

He criticised the proposed means-tested approach as “hurtful” to the city’s elderly, and compared it to having his children check his bank account before handing him an allowance.

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Tse Chin-pang, 73, also said he would not participate in the scheme despite he and his wife having HK$400,000 in savings – well above the HK$50,000 minimum payment.

Although his rent sets him back HK$11,000 per month, he derives enough income from a 300 sq ft industrial unit he owns and the old age living allowance to supplement his savings and cover all expenses.

While middle-class elderly citizens, like Mak and Tse, were not attracted to the annuity scheme’s returns, those even less well-off said they simply could not afford to invest.

Kwok Chih-yin said he had HK$50,000 to HK$60,000 in his bank account, but he could not risk investing the money because he might need it for emergencies.

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The 84-year-old, who moved to the city about 40 years ago from the mainland and worked in the textiles industry, rallied the call for a non-means-tested universal pension scheme for all elderly, who “worked hard to contribute to society”.

Kwok lives with his son and daughter-in-law in an old shophouse owned by his father. But even with an old age living allowance of HK$2,490, he does not come close to covering his monthly expenses of HK$3,500.

One of his biggest expenses, he said, was medication to treat his diabetes and high blood pressure which costs about HK$1,000.

Hong Kong retirees must depend on a patchwork of support in old age

Kwok said sometimes he is forced to pick up cardboard or skip meals to ensure he has enough money to spend.

Fung Ho-chu does not pay rent because she lives with her son, his wife and children. But even without that expense, the 68-year-old still has to do odd jobs just to cover her monthly expenses, such as picking up litter during the Rugby Sevens event.

“I feel bad asking my son for money as he needs it to raise the grandchildren, especially for their education,” she said. “While he gives me money for a trip to China, which is more affordable, sometimes I’m hoping to go to other places such as Thailand.”

Fung said she would have loved to participate in the annuity scheme, but only had about HK$3,000 in her bank account.

“If I had tens of thousands of dollars, then this plan would help me, but now I can only dream,” Fung said, adding that the government should implement a universal pension scheme.