Mainland China’s retirement awareness improves
Positive signs more people are saving for retirement compared to last year
19 Sep 2019 | The Asset

WHILE considerable barriers remain in mainland China when it comes to being retirement ready, with women facing the relatively bigger challenge, there are many encouraging positive signs that more people are saving for retirement compared to last year, a survey from Fidelity International and Ant Fortune reveals.

The China Retirement Readiness Survey 2019 was co-developed by Fidelity International and Ant Fortune, a comprehensive wealth management platform for Alipay users.

It found that half of the respondents surveyed are saving for retirement, up from 46% in 2018, with the ratio of younger savers increasing to 48% from 44%. Overall, respondents generally want to retire earlier, with their target retirement age coming down from 57.6 years last year to 55.8 years.

Lack of capital was once again highlighted as a key hurdle to saving; this year’s survey took a closer look at the financial challenges faced by Chinese savers and identifies the specific road blocks that are hindering their retirement saving and long-term investment.

The survey suggests that competing financial needs are getting in the way of Chinese savers’ ability to put in place steps that would help them reach their retirement goals. Securing a comfortable life for parents is selected as an important life goal by the largest number of respondents (66%), even though the number of people who expect to rely on their children to support their retirement is diminishing.

Other priorities included ensuring a good education for children (64%) and achieving a successful career (52%). Less than half of the respondents (46%) indicate having a comfortable retirement as one of their top life goals.

According to the survey, Chinese women have higher retirement savings targets and a stronger willingness to save. Close to one-third are open to learning more, suggesting strong demand for retirement planning advisory services. Similar to the global trend, women in mainland China face a bigger retirement funding shortfall and also encounter more challenges in planning and saving. Close to 60% of women haven’t started to save for retirement, while the figure for their male counterparts is 45%.

A couple of reasons contributed to this disparity. Firstly, women tend to be more focused on family priorities. More women than men are keen to provide high-quality education for their children or buy a house. More than one-fifth of women, the largest single cohort, said securing their children’s education is their most pressing goal. Only 42% of women consider a comfortable retirement life as a key life goal, compared to 49% of men.

In addition, the overall earning power of women is lower, despite the fact that more women than men attend university, and that mainland China’s female labour force participation rate is comfortably higher than the global average. The results show that women’s average personal income is about 21% lower than that of men. Meanwhile, 69% of female respondents said they lack the capital for retirement savings.

Lacking investment and retirement planning knowledge comprise a key barrier for women’s retirement savings. More than a quarter of women (27%) don’t have a retirement target, compared with 18% of male respondents. Furthermore, a greater proportion of women (30%) than men (24%) said that they would be more likely to start saving and investing if they had better knowledge of investing and retirement.

Since August 2018, over 50 pension target funds have been launched in mainland China to support Chinese savers’ investing for retirement. With this positive development on the product front, the question of how to encourage people to save more and proactively leverage investment tools to fulfil their retirement goals is the next major challenge.


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