People in China increasingly focused on retirement planning: bank report

A report released by China CITIC Bank on Friday has stated that people in the country are becoming increasingly aware of the need for retirement planning and taking a more proactive approach to preparing for old age.

To compile the report, the bank and a number of its subsidiaries obtained 10,137 valid samples through online platforms and offline interviews, covering people aged 18 and above across 31 provinces, autonomous regions and municipalities nationwide. The survey found that among respondents under the age of 50, 85 percent made monthly retirement plans.

At a forum in Beijing on Friday, Li Yimei, vice-chairwoman and general manager of China Asset Management, said she believes retirement wealth management should start early, beginning with small investments.

Wang Xusong, general manager of China CITIC Bank's private banking department and wealth management department, said that the diversification of private pension account fund allocations has become increasingly evident. So far this year, more than half of funds have gone into time deposits, while allocations to wealth management products, mutual funds and insurance have risen compared with a year earlier. This is based on a consensus that in a low-interest-rate era, individuals need to adopt a more aggressive and diversified asset allocation strategy to achieve better investment returns, Wang said.

Xie Zhibin, vice-president of the bank, said that the fourth plenary session of the 20th Central Committee of the Communist Party of China emphasized the strategic foundation of expanding domestic demand and the importance of improving people's standard of living and boosting consumption, pointing the way for the financial sector to serve high-quality development.

Xie noted that boosting consumption requires coordination between supply and demand, with financial services playing a role in supporting consumption upgrading.

By strengthening its wealth management capabilities, China CITIC Bank helps residents increase property-based income. At the same time, it is building a pension finance service system covering the entire life cycle, thereby reinforcing the consumer ecosystem.

At the forum, financial industry professionals, aging-science researchers and pension-service providers discussed elderly care, wealth management and consumption.

By the end of 2024, China had 310 million people aged 60 or above, including more than 45 million elderly with disabilities or dementia. However, there are currently just over eight million elderly-care beds nationwide, leaving a significant supply-demand gap, according to Niu Laibao, chief accountant of Genertec Health and Senior Care.

Despite this, the occupancy rate of elderly-care institutions in China is just a little over 40 percent on average. In some places, it is difficult to find a bed, while in others, there are substantial vacancies. This indicates a mismatch in the ability and willingness to pay for elderly care, said Niu, who argued that China will need to meet this demand through inclusive elderly-care models in the future.

He also noted that many issues still need to be resolved to streamline the connection between healthcare and eldercare. In addition, with digitalization and intelligent technologies advancing, elderly people are becoming "younger than ever". Their mobility may be limited, but they can still keep up with young people in the digital realm, creating strong demand for high-tech products adapted for seniors.

Niu said the development of the elderly-care industry requires close cooperation between financial institutions and elderly-care enterprises, advancing toward models that are sustainable, replicable and affordable.

Gao Chengyun, director of the China Research Center on Aging, said that as China's elderly population continues to grow, their needs in age-friendly living, digital services, health-related consumption, and financial consumption will become increasingly prominent, Gao said.

He emphasized that as elderly people experience declining physical function, they want to meet all their needs in one place. While bank cards traditionally serve mainly financial purposes, in the future they could become a gateway to elderly-care lifestyle services — a platform linking products from bank partners.

According to Wang Tao, deputy general manager of China CITIC Bank's asset custody department, companies establishing employee pension protection schemes may initially have simple savings-based financial needs, but these are now shifting toward comprehensive elderly-care service demands.

Companies are increasingly focused on the performance of annuity managers in terms of long-term, stable capital preservation and appreciation. They are also paying greater attention to annuity-operation efficiency, particularly the risk-control capabilities and service responsiveness of management institutions.

Moreover, companies hope asset management institutions will provide their employees with more comprehensive elderly-care service platforms — going beyond financial services to include personal retirement planning, health management, welfare benefits and other full-scenario elderly-care services, Wang Tao said.

"Anxiety over retirement is an important factor contributing to today's weak consumption. Strengthening occupational or employer-sponsored pensions and voluntary private pension plans can, to some extent, increase people's expectations for future financial security and enhance their current willingness and ability to spend," he said.

According to China's Ministry of Human Resources and Social Security, by the end of the second quarter, 172,350 companies had established enterprise annuity schemes, covering more than 33 million employees. By the end of November 2024, the number of individuals who opened private pension accounts exceeded 72 million.

Wang Tao said that, although China's private pension scheme has made significant progress, its coverage remains far from sufficient. He called on industry participants to work together to cultivate the market, encouraging more companies to set up enterprise annuities and other supplementary pension schemes.