The study, jointly conducted by the Hong Kong Retirement Schemes Association (HKRSA) and pension consultant WTW, found that a woman retiring at 65 and living to 90 would need HKD5.4 million to cover expenses during that period. That amount would rise to HKD7.1 million if she lived to 100, as reported by the South China Morning Post.
A man retiring at 65 and living to 86 would need at least HKD4.6 million, increasing to HKD6.6 million if he lived to 97.
The figure stands in stark contrast to the average Mandatory Provident Fund (MPF) balance of HKD319,561 as of March, according to MPF Ratings. The city’s compulsory pension scheme covers about 4.8 million members.
An elderly man stands on a street with old buildings in Hong Kong. Photo by Unsplash/Andy Thanh Hai |
To narrow the shortfall, the study called on the government to introduce stronger tax incentives to encourage voluntary MPF contributions and promote a broader range of financial products tailored to retirement needs, as reported by The Standard.
“Retirement adequacy in Hong Kong is no longer just a question of individual savings discipline. It is a structural challenge shaped by longevity, rising living costs and limited employee engagement with voluntary savings,” said William Chow, head of retirement for Hong Kong and Macau at WTW.
“Our study shows that employers are already playing an important role, with many contributing above statutory minimums, but more can be done to strengthen support through better plan design, targeted financial education and mechanisms that make saving easier and more relevant for employees at different life stages.”
The study surveyed companies employing more than 90,000 workers in Hong Kong and found that many were already making voluntary MPF contributions above the statutory minimum, ranging from 8% to 15% of salary, according to its webstie.
Employers are required to contribute 5% of an employee’s monthly salary, subject to a cap of HKD1,500 a month.
HKRSA and WTW also urged the government to expand the issuance of specialized silver bonds and local infrastructure bonds as low-risk investment options for retirees, saying such products could generate income while strengthening Hong Kong’s wealth management industry.
“Achieving true retirement adequacy thrives on a collective, family-centric approach,” said Janet Li, chairwoman of HKRSA’s executive committee. “We have a timely opportunity to evolve retirement protection alongside rapid demographic shifts and rising longevity.”
Robert Lee Wai-wang, a lawmaker representing the financial services sector and chairman of Grand Finance Group, said Hong Kong residents may need to consider working longer and beginning retirement planning earlier.
Retirees could also consider living in other Greater Bay Area cities, where costs are lower while Hong Kong remains within easy reach, he said.
Kenny Ng Lai-yin, a strategist at Everbright Securities International, said Hong Kong could also consider following the international trend of delaying retirement to help workers earn income for longer.
Hong Kong has no official retirement age, although many companies require employees to retire at 60 or 65.
“If the government can offer incentives to encourage companies to delay retirement, it would help employees continue working into their 60s and earn more income,” Ng said, as quoted by the South China Morning Post. “Mainland China and some overseas markets have already raised the retirement age in response to ageing populations.”
Ng also suggested that regulators consider raising Mandatory Provident Fund contribution levels to boost retirement savings.
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