Nearly 40% of Hong Kong citizens have dipped into their retirement savings; Retirement reserve shortfall has reached HK$2.23 million record high;
Nearly 80% of respondents have cut leisure and entertainment expenses due to pandemic and are willing to use money saved for retirement saving and investment;
More than 30% of respondents find more time to manage their finances as they stay home more, and half of respondents are interested in investing but hesitant to make the move due to concerns about the economic outlook

AIA Hong Kong announced the results of the “12^th AIA Desired Retirement Tracker” (the “Survey”) today with the following key findings:

COVID-19 has ravaged the globe, causing significant social and economic impacts. The survey reveals that 55% of respondents have experienced income cut during the pandemic, and 38% have dipped into their retirement reserves to meet their daily expenses. The retirement reserve shortfall of the Hong Kong working population has widened further. Our independent actuarial calculations of each respondent's¹ retirement preparedness reveals that, for those with insufficient retirement reserves, the retirement reserve shortfall has reached a record high of HK$2.23 million (median). 61% of respondents say they will have to delay their retirement plans due to the pandemic.

Concurrently, 79% of the respondents agree their retirement reserves will depreciate with time, noting the importance of finding ways to grow their retirement reserves. Due to various pandemic-related measures, people have been staying home more often, 78% of the respondents have cut back in their leisure and entertainment expenses and are willing to use the money saved for retirement saving and investment.

With COVID-19 having a profound impact across the globe, health awareness levels are expected to be higher than ever. The survey has also explored the public's attitude towards medical protection and found 81% of respondents agree that medical protection has become more important amidst the pandemic. Nevertheless, the survey also reveals the public has not taken any necessary steps in response, and nearly 70% (67%) have not increased their medical protection during the pandemic.

As for retirement medical plans, 28% of the respondents do not know or do not budget for retirement medical expenses, which is similar to the previous survey (26%). This shows the pandemic has neither increased people's awareness of nor their preparedness for long-term medical protection after retirement.

Ms. Elaine Lau, Chief Corporate Solutions Officer of AIA Hong Kong and Macau, remarked, “We understand that some people may need to dip into their retirement reserves as they are not be able to make ends meet under the current economic environment. We hope that when the pandemic and economy stabilise, people will re-examine their retirement plans as quickly as possible and increase savings to make up for lost time. For those who can afford to do so, it is advisable to keep a disciplined saving habit in order to build a more secure safety net. The public could consider making MPF Tax-deductible Voluntary Contributions (TVC), which has a simple and flexible contribution model. In addition to tax deduction benefits, one can adjust the mode and amount of contribution according to individual needs and varying income levels. In terms of medical protection, the public could consider using Voluntary Health Insurance Schemes (VHIS) and Portable Employee Voluntary Solutions to meet their future medical protection needs.”

The survey reveals that staying home due to the pandemic has given the public more time and opportunity to manage their finances and investments: 36% of respondents say they have more time to manage their money; more than 20% have increased the frequency (22%) and amount (20%) of investment transactions. However, some of the respondents who are interested in investing feel uncertain about the investment outlook: 51% express both interest and doubts about investing. The three main reasons behind are: concerns about investment losses (62%); concerns about the lasting impact the pandemic might have on the economy and the investment market (50%); and lack of financial knowledge or professional advice (29%).

We also find that the use of technology during the pandemic has changed people's financial management patterns. The survey shows that 32% of the respondents have increased their use of digital channels for investment, and 31% say they have learned some up-to-date information or functions relating to electronic financial management.

Mr. Leo Cheung, Chief Wealth Management Officer of AIA Hong Kong and Macau, said, “The survey shows that the public have more time for wealth management. Today, many investment tools are available in the market to help people make long-term retirement planning, such as Investment-Linked Assurance Schemes (ILAS), which have both life protection and investment options. The survey also reveals that although respondents are keen to grow their assets, they may not be able to make the most appropriate decisions for themselves. In fact, nowadays, the latest technology can be integrated with professional investment analysis and offers valuable references for individual investors.  By making good use of smart technology, the public can have a better retirement investment planning and live Healthier, Longer, Better Lives.”

AIA Hong Kong now offers “Robotic Investment Choice Service" for designated ILAS customers. The service combines the analysis and experience of the professional team of asset management experts from AIA Investment Management Hong Kong Limited, and greatly reduces the hassle of selecting investment options by allowing selected ILAS customers to view their own personalised reference portfolio that suits their individual investment preferences. Customers can also access the service via the mobile application on the go, managing their assets and investments anytime, anywhere.

The “12^th AIA Desired Retirement Tracker" was conducted between October 19 and October 29, 2020. Through online questionnaires and face-to-face interviews, a total of 1,000 working people in Hong Kong aged 18-65 with at least one MPF account were interviewed to explore their goals, views on their desired retirement life and the possibility of achieving them. The survey data is weighted according to the distribution of Hong Kong's working population (including age, gender, and monthly personal income) to ensure that the sample fully reflects the characteristics of Hong Kong's working population. The entire survey was conducted by Cimigo, an independent market research firm.

####

About AIA Hong Kong and AIA Macau
AIA Hong Kong and AIA Macau are subsidiaries of AIA Group Limited. AIA Group Limited established its operations in Hong Kong in 1931. To date, we have over 19,800 AIA financial planners¹, as well as an extensive network of brokerage and bancassurance partners. We serve over 3 million customers², offering them a wide selection of professional services and products ranging from individual life, group life, accident, medical and health, mandatory provident fund, personal lines insurance to investment-linked products with numerous investment options. We are also dedicated to providing superb product solutions to meet the financial needs of high net worth customers.

Appendix:

The 12^th AIA Desired Retirement Tracker
Summary of Key Data