Nine out of 10 middle-income Hongkongers approaching retirement age have no firm plan to stop working because they fear their pension savings are insufficient, according to a report released on Monday.

Many also believe the Covid-19 pandemic is likely to increase health care costs in the future, a further blow to their retirement plans.

Almost 90 per cent of the respondents, aged between 50 and 59, had no specific retirement date in mind, while two thirds wanted to continue working as long as possible, according to a survey commissioned by the Hong Kong Retirement Schemes Association, an organisation that promotes pension schemes in the city.

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They may have good reason to worry. The city's retirement scheme, the Mandatory Provident Fund, can on average only provide about 40 per cent of a person's salary after their retirement, the study showed.

The study estimated an upper middle-income individual would need to spend HK$18,000 (US$2,323) per month to get by, but the current retirement plan can only provide them with about HK$8,000 to HK$12,000 a month.

"Many people in Hong Kong don't plan for their retirement and fail to make a long-term plan," said Doris Ho, chairman of the Hong Kong Retirement Schemes Association.

Many middle-class people aged between 50 and 59 only started to contribute when the MPF was introduced 20 years ago, and the mandatory contribution is capped at HK$3,000 a month, equally split between the employer and employee.

"The MPF is not going to be enough for those who are now in their 50s. The middle-class individual may either need to continue to work or they will need to accept a lower living standard if they are forced to retire at age 60," said Kenrick Chung, general manager of employee benefits at Realife Insurance Brokers.

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"This will be bad news for restaurants and retailers in the city as Hong Kong has an ageing population. Many people are entering retirement age. If they are unemployed and need to tighten their belts, they will spend less on dining out or shopping. It is inevitable."

Younger employees, who have more time to contribute to the MPF before their retirement, will have a bigger sum when they retire.

Hong Kong is one of the fastest-ageing societies in the world. Between 2018 and 2038, the number of people aged 65 or above will almost double from 1.27 million to 2.44 million, while their share of population will increase from 18 per cent to 32 per cent, according to government estimates. Life expectancy in Hong Kong is the highest in the world at more than 85 years, according to World Bank data from 2018.

The biggest concern of retirees is health care expenses, according to the survey. Half of the 222 respondents said they believe the pandemic will make health costs more expensive in the future.

The association urged the government to relax eligibility criteria to help middle-income households to enjoy more government subsidies and allowances. At present, benefits such as public housing and social security are only for elderly people and those in poverty, and middle-class people do not qualify.

"In addition, we suggest that the government lead by example and raise the retirement age for civil servants, thereby setting a benchmark for the private sector to follow," Ho said.

Hong Kong does not have an official retirement age but many companies require their staff to retire at 60 or 65, similar to civil servants.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

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