Rethinking old-age income security in Hong Kong and Singapore - An analysis of elderly income and family support

Pension analysts have long observed that the mandatory savings public pensions in Hong Kong and Singapore may not generate adequate retirement incomes. But living arrangements and intergenerational transfers are stronger determinants of old-age income security in these populations. This study examines the extent of reliance on adult children by combining analyses of elderly income and family support for the first time, based on datasets from the Hong Kong census studies (1996, 2006) and Singapore's National Survey of Senior Citizens (1995, 2005). The analysis reveals a wide income gap between the 65+ age group and younger people. Public pensions were not a major source of retirement income. Instead, old-age income security was boosted by intergenerational co-residence. Among elderly people who lived with their adult children in Hong Kong, 32% had equivalised household incomes below 60% of the median for adults, compared to 79% among those who did not live with their children. Similarly, just 3% of Singaporean seniors cited public pensions as their top income source, whereas about 60% reported that they depended mainly on their children. The protective function of family support was more pronounced for women and individuals with lower incomes. Elderly persons from the lower individual income bands in Singapore were more likely to co-reside with their children and depend on them for financial support. In Hong Kong, the median individual income of elderly persons who lived with their children is 28% that of persons who did not. Declining co-residence in both societies therefore signals a risk to old-age income security, especially for women and low earners, as reflected in the rising relative poverty rate of elderly persons in Hong Kong. Pension policymaking has not directly addressed this risk so far and needs to focus on exchanges within the family.

Full paper download: 2.2.3 Ng_Kok_Hoe.pdf