Can the over 65s survive on MPF savings?

Experts forecast that 30 percent of Hong Kong’s population will be retirees of 65 years and older by 2036. Given today’s high life expectancy, many of them will live into their 80s, and may face two decades or more of financial hardship. Small family sizes mean they will receive less support from their offspring, while limited government welfare subsidies won’t fill the gap. Oxfam’s 2023 survey found that 40 percent of the elderly are living in poverty. Shadow Li reports from Hong Kong.

Hong Kong's demographics show a mushrooming elderly population of retirees aged 65-plus each year. This is a ticking social time-bomb. Government expenditure on elderly welfare subsidies tripled from HK$18.3 billion ($2.34 billion) in 2012-13 to HK$51.2 billion in the 2022-23 financial year, constituting 76 percent of recurrent expenditure on social security.

Those over 65 years old who remain in the workforce tripled from 65,000 in 2012 to 195,700 in 2022, representing 13.3 percent of the city's total labor force. But the elderly labor participation rate remains low compared with that of South Korea at 37.3 percent, Singapore at 32.1 percent, and Japan at 25.6 percent.

A low fertility rate, small families and cramped living conditions make next-generation support for retired parents limited. The World Bank considers financial support from children to be one of its five pillars for sustainable elderly retirement. The high life expectancies of 82.5 years for males and 87.9 years for females mean that the elderly may face two decades in which to cope financially beyond retirement. In a reply to a China Daily query, the government provided data showing that four out of five retired elderly were living on welfare in 2021.