Younger employees are less confident with their retirement savings
HONG KONG, July 16, 2024 – More than half of Hong Kong employees (52%) are at risk or struggling with respect to their finances, according to the new survey by WTW, a leading global advisory, broking and solutions company. The 2024 Global Benefits Attitudes Survey also found that more than a third of the employees (35%) are living paycheck to paycheck as their financial situation continues to deteriorate.
The research also shows that close to two-thirds (63%) of workers’ wellbeing are negatively impacted by financial concerns, and more than a quarter (29%) believe their financial problems will get worse in the next year. In particular, 28% say their financial situation is causing them higher levels of stress and anxiety.
These challenging financial circumstances are impacting employees’ confidence in when they can retire. Among those struggling, more than half (57%) reported that they are unable to improve their retirement situation. This has a substantial impact in employee engagement, productivity, emotional health such as anxiety and depressions, as well as other aspect of employee wellbeing.
Furthermore, the younger and mid-salaried employees are less confident with their retirement savings. More than one-quarter (27%) of those aged 40 to 49 years are at risk of their retirement needs and those age less than 40 years are among the highest in proportion among all age groups who are not on the right track to retirement and saving 8% or less for retirement.
William Chow, Head of Retirement, Hong Kong and Macau, WTW said: “Our survey shows that one-quarter (25%) of employees aged 50 years and above have indicated that they plan to work past age 66 years, up from 17% before the pandemic in 2019. At the same time, 72% of employees admit that they are not saving as much for retirement as they should be, compared to 69% in 2019.
“This calls for a concern as there is a strong link between short-term financial problems and savings for retirement. Many employees have work to do to address their retirement needs. Employer retirement programmes remain the primary path for employees to save for retirement. With challenges meeting their day-to-day expenses while still planning for retirement, employees are looking for help from their employer to build a retirement nest egg, but they also report needing flexibility for emergencies and a desire to maximise their benefits.”
According to projections by the Census and Statistics Department of Hong Kong, the number of senior citizens will almost double to 2.74 million in 2046, compared to 1.45 million in 2021, excluding foreign domestic helpers. Hong Kong faces the issue of an ageing population and seniors will make up to more than a third of Hong Kong’s population.
“Retirement benefits are as important as ever for attraction and retention. Yet, there is a clear disconnect in priorities between employers and employees. Employers have an opportunity to align their focus with employee value, cost pressures, and talent objectives to address how their benefit programmes align to retirement and financial wellbeing initiatives,” added William.
Eric Lam, Head of Health & Benefits, Hong Kong & Macau, WTW, said: “High inflation combined with the aftermath of a once in a generation pandemic is still causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing. However, some improvements have been seen in the past few years which give hope that actions taken by employees and employers are helping.
“Employers should continue to take action to improve financial wellbeing within their organisation. These can include adequate education for employees to help plan their resources and close financial gaps, as well as connecting employees with relevant elements of their total rewards package.”
The 2024 Global Benefits Attitudes Survey was conducted from January to March 2024. Respondents in Hong Kong include 1,000 employees working at medium and large private sector employers, representing a broad range of industries.
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