The "14th AIA Desired Retirement Tracker" reveals the attitudes of working people in Hong Kong towards retirement in the post-pandemic "new normal" and offers suggestions on aspects including retirement savings, medical protection, physical and mental wellbeing, and retirement investment. Pictured is Ms. Elaine Lau, Chief Corporate Solutions Officer of AIA Hong Kong and Macau.

Retirement savings

• Forty-seven percent of respondents have increased their personal savings over the past three years (i.e., during the COVID-19 pandemic). Of these, 41% have achieved extra savings of more than HK$40,000.

• Seventy-three percent of respondents said they will increase their entertainment spending as their social lives return to normal. Well over half (58%) plan to use their savings for so-called “revenge” travel, while 46% plan to travel in the next three to six months with an estimated budget of HK$22,918 (median).

• Among respondents who have been infected with COVID-19, 80% agree life is fragile and that they should enhance their medical protection. However, only 17% have purchased additional medical insurance since having the virus.

• Among all respondents, 22% do not have any medical insurance and 13% have group medical insurance only, meaning 35% may lack medical protection after retirement.

• Fifty-eight percent of respondents prefer a hybrid working mode and hope to work from home an average of 2.8 days per week. However, 76% think that work-from-home arrangements cause the boundary between work and personal life to blur.

• Seventy-eight percent of respondents would like to have sustainable investment elements in their retirement investment portfolios, while 80% admit that they do not know how to choose ESG MPF products.

The survey revealed that nearly half of respondents (47%) have increased their personal savings over the past three years due to reduced travel or shopping. Of these, around 40% have achieved extra savings of over HK$40,000. Also, after three years of pandemic restrictions, people are ready to increase their spending on entertainment and travel: 73% of respondents will spend more on entertainment as social life returns to normal; 58% plan to travel; and nearly half (46%) plan to travel in the next three to six months, with an estimated budget of HK$22,918 (median) to include flight tickets, accommodations, shopping, etc.

Medical protection: people agree on its importance but fail to act

The survey also explored views on medical protection among respondents who have been infected with COVID-19. Eighty percent said "life is fragile and [I] should enhance [my] medical protection", yet only 17% have purchased additional medical insurance since they had the virus, demonstrating that only a small portion of people have taken action to acquire additional medical protection. Respondents gave three main reasons as to why they have not purchased additional medical insurance: 42% said they plan to use only public medical services in the future, 38% have insufficient funds, and 19% think the protection provided by their employer's group medical insurance is adequate.

Among all respondents, more than one fifth (22%) do not own any individual medical insurance and 13% have group medical insurance only, which means 35% of respondents may lack medical protection after retirement. As medical expenditures increase with age, their retirement savings may be insufficient for their actual needs.

Physical and mental wellbeing: work-life imbalance affects health

As society returns to normalcy, some businesses have gone back to office working arrangements. However, the survey revealed that nearly 60% of respondents (58%) prefer a hybrid working mode (i.e., one that gives employees the flexibility to work from office or home) and hope to work from home an average of 2.8 days per week.

However, there were underlying concerns. Seventy-six percent of respondents agree that work-from-home arrangements cause the boundary between work and personal life to blur, 70% think they result in longer working hours, and 64% think they will reduce social lives and hence contribute to a stronger sense of solitude.

Retirement investment: interested in ESG investment, but hindered by limited knowledge

The pandemic has taught the lesson that individuals, society and the environment are interdependent. The survey found that 78% of respondents would like to incorporate sustainable investment elements into their retirement investment portfolios. However, respondents also have limited knowledge of ESG investments¹: 80% admit that they do not know how to choose ESG MPF products, and 60% think ESG investments are limited to environmental protection or carbon reduction.

Ms. Lau added, "The survey found that working people have become more aware of their physical and mental wellbeing and are more determined to pursue a healthy lifestyle than before. AIA strives to go beyond traditional employee benefits by bringing together group insurance and workforce wellness, providing employee benefits solutions that cover physical, mental, social and financial wellbeing and help the public live 'Healthier, Longer, Better Lives'. As for ESG, promoting the sustainable and healthier development of society has always been one of our corporate strategic priorities. As interest in ESG-related MPF funds rises among our members, we will continue to offer educational tools through a variety of channels to enhance their knowledge of ESG and related funds."

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References

1. ^{^} Media OutReach (www.media-outreach.com)