Review essay: prospects for old-age income security in Hong Kong and Singapore

This review shows that Hong Kong and Singapore face a distinct and serious challenge to old-age income security due to their mix of public pension provision and intergenerational family support. They are among the fastest ageing societies internationally and will be the oldest in Asia after Japan by 2030. Yet their public pensions remain weak. Defined contribution pensions, even for full-career workers, are projected to replace just 17% of net lifetime average earnings in Singapore and 41% in Hong Kong, compared to 70% across the OECD countries. Instead, older persons in Singapore and Hong Kong depend mainly on their adult children for income security in the form of co-residence and cash transfers. More than half of them live with adult children. In Singapore, more than two-thirds receive financial support from the younger generation, compared to just 5% on average in Europe. Current welfare theory would suggest that Singapore and Hong Kong portray an extreme variant of welfare regime where the state's role is more limited than in the liberal regime and the family's role more central than in the Southern European regime. The sustainability of current old-age income security arrangements is therefore particularly vulnerable to new social risks that threaten the stability of traditional family structures. Already co-residence and financial support from adult children are declining. A fuller assessment of the prospects for old-age income security must focus on the interaction of pension policy and family support for elderly persons in different gender and income groups