RESEARCH REPORT
Report on HKRSA Retirement Survey:
Can Middle-income Group Enjoy a Worry-free Retirement?

Everyone wants a rewarding retirement. However, due to high cost of living in Hong Kong, many people worry about their quality of life after retirement. In 2017, the Hong Kong government adopted a three-pronged strategy for the city’s future social security system, including provision of retirement income with old age allowance for low-income households, and various incentive programmes for personal savings and investments for higher-income households. Yet, these policies do not cover middle-income earners, who are usually ineligible for means-tested social security, and do not necessarily have sufficient investments or savings to maintain a similar standard of living after retirement. In light of this issue, we, together with the Caritas Institute of Higher Education and the Sao Po Centre on Ageing, the University of Hong Kong conducted an in-depth research and presented a number of recommendations aimed at improving retirement protection for middle-income households.
What did the survey involve?

What did the survey involve?

We conducted in-depth research into the expenditure and spending habits of elderly households in order to review the extent of protection offered under the current Hong Kong’s retirement protection system. We also investigated the retirement readiness of middle-income households, as well as their expectations and concerns about retirement and collected feedback on how the retirement protection may be improved. The results of the survey were then used to compile a list of feasible recommendations on Hong Kong’s pension system and services for better provision of retirement protection in particular for the middle-income group.

 
Who were the subjects of the survey?

Who were the subjects of the survey?

The survey respondents were aged 50 to 59 years and had an average monthly income of HK$18,000 to HK$30,000 in the second half of 2019.
Who were the subjects of the survey?
How was the survey conducted?

How was the survey conducted?

We used the results of the Household Expenditure Survey to analyse the expenditure and spending habits of the survey respondents, and then calculated the income replacement ratio under the key pillars of the Hong Kong pension system after 40 years of employment. We also used online questionnaires and telephone interviews to understand the retirement readiness, expectations and plans of the respondents. In-depth interviews were also conducted to ascertain the respondents’ views on retirement and the current pension system.
Our recommendations

Our recommendations

Following a series of interviews and surveys, we have attained a better understanding of the challenges faced by middle-income households in relation to retirement. Based on the results of the survey, we came up with the following recommendations for the government and social organisations:

Key retirement pillars: Provide more social welfare for elderly residents, continue to improve the MPF system and promote annuity plans, and strengthen measures to encourage participation in voluntary pension schemes.
Retirement education: Improve education to emphasise the importance of preparing early for retirement, raise awareness of retirement planning and equip people with the requisite knowledge and skills to plan for retirement, and raise the appeal of pension schemes.
Employment opportunities for the elderly: The government could lead by example and raise the retirement age for civil servants, as well as recommend employers to continue making MPF contributions for employees aged 65 or above.
Health care, property maintenance and well-being: Improve awareness of health issues, increase the transparency of the health care system, collaborate with the private sector to reduce waiting times for specialist clinics, use video consultations and medication management services to reduce costs, provide assistance with housing maintenance costs, and provide comprehensive social network support to protect the physical and mental well-being of the elderlies.
Greater Bay Area: Meet the needs of local residents in relation to retirement products and services.
 
Our recommendations
We hope that this survey will help to raise awareness of the retirement issues faced by middle-income households and provide practical solutions to ensure that all of Hong Kong’s elderly can enjoy a happy and financially secure retirement.

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