Pension coverage and pension freedoms: Lessons from Hong Kong
Aug 4, 2016 | REPORTS
This think-piece looks to Hong Kong, whose pension infrastructure is similar to the one emerging in the UK to examine the potential impact of the UK’s recent pension reforms.
Pension reforms in the UK are transforming the way that citizens, especially those who lack access to an employer funded pension scheme, save for retirement. The rollout of the Workplace Pension, rising state pension ages, and delivery of the basic State Pension have the cumulative effect of both extending pension rights to all workers and shifting risks and responsibilities from government and employers toward individuals.
This think-piece looks to Hong Kong, whose pension infrastructure is similar to the one emerging in the UK to examine the potential impact of these reforms. While pension access has indeed been made universal in Hong Kong, old age poverty remains an issue with pension replacement rates lower on average than the UK. Like their UK equivalents, many Hong Kong working poor are having to delay retirement due to lack of savings and, despite Hong Kong employers complaining of skills and labour shortages, older workers are at risk of being pushed out of work before they can afford to retire. The Hong Kong experience points to the importance of employment protections for older workers to be strengthened in tandem with pension reforms so that older workers can better plan and manage their retirements.