Half of Hong Kong workers unprepared for retirement

Half of Hong Kong workers unprepared for retirement | Insurance Business

Half of Hong Kong workers unprepared for retirement

Around half of working people in Hong Kong believe they are not sufficiently prepared for retirement, a survey by pension product provider BCT Group has revealed.

The study also showed that 41% of workers see retirement as having “no end in sight”, while 30% believe they have to work past age 65 to support themselves.

The survey interviewed 805 respondents, 735 of which were working while 70 were retirees, The Standard reported.

Around 60% of workers hope to enjoy financial freedom in the future, but half of them save less than a tenth of their monthly income for their retirement fund. Meanwhile, 69% did not make any voluntary contributions on top of the mandatory provident fund (MPF) contributions.

Aside from MPF, 60% of respondents said they invest in stocks in preparation for retirement. Other financial instruments respondents use are insurance saving plans, investment-linked insurance, funds or bonds, foreign currencies, and property investments.

More working respondents choose annuity (20%) compared to retirees (6%), the survey showed.

According to Billy SC Mak, associate professor at the school of business of the Hong Kong Baptist University, annuities are more popular among working people nowadays, and now that the government’s public annuity scheme can be mobilized without waiting for a few years.

Mak advised that workers should set aside 30% of their monthly salary for their post-retirement future. He clarified that annuity and MPF schemes are not competitors, and instead complement each other. As such, workers should diversify their portfolio and avoid putting all their savings into one vehicle.

 

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