Posted inStudies

Half of Hong Kong women face retirement income challenges

Many female respondents to a Fidelity survey fear they will have insufficient cash for their old age.

Only one in three women say they are confident in their ability to make their pension contributions, whereas 40% of men say the same, according to the Fidelity’s Global Women & Money Study 2022.

Due to the lack of confidence in financial planning, 46% of the surveyed Hong Kong women are worried they are unprepared financially for retirement, while 43% of men felt the same.

“With the survey findings suggesting that a sizeable proportion of women believe that they do not have sufficient income to fund 21 years in retirement, it is even more critical they plan early and set realistic, achievable goals,” said Charlotte Chan, head of distribution, Hong Kong workplace and personal investing at Fidelity International.

“Maintaining good savings and spending habits, as well as seeking appropriate financial advice, can help maximise the value of their hard-earned income and stay on track to achieving a comfortable retirement.”

Women in Hong Kong expect to retire at 63 and then to rely on HK$22,000 per month on average for 21 years.

In comparison, men expect to retire two years later, and to fund 20 years in retirement on HK$23,000 per month on average.

The lack of confidence may be attributed to the fact that women are less active in their retirement contributions and planning, said the investment manager.

Savings shortfall

The survey found that only 27% of women make additional contributions to their pension regularly and 37% of women say they actively make decisions about how their pension should be invested.

Top reasons that prevent women from saving more into their pensions include a lack of available funds after outgoings (37%), not knowing how best to save for retirement (31%), and having other saving priorities, such as for a house or a car (20%), the survey found.

When deciding how much should they need in retirement, over 60% of women prioritise being able to travel, followed by maintaining personal hobbies and being able to afford care to stay in their own home.

Both women and men in Hong Kong agreed that it is most important to meet the required or desired standard of living in retirement, followed by disposable income and what they can save for retirement after essential bills have been paid.

Market volatility fears

Being concerned about the current market volatility, women are more likely than men to have decreased the amount which they saved, invested, or contributed to their pensions over the last 12 months.

While around 26% of men increased their allocations to their savings, investments or pensions, only around 20% of women have done so, according to the survey findings.

Two in three women investors said they are worried about the continued pandemic uncertainty (66%), followed by the long-term health of the economy, and market volatility.

“Recent market volatility may have weighed on investors’ confidence, but it is worth noting that volatility is an inevitable and inherent part of investing. Experience tells us that some of the most interesting investment opportunities appear during down markets,” said Chan. “Staying focussed on the longer term and staying invested throughout different market cycles can help investors smooth returns

Part of the Mark Allen Group.