In a significant policy shift, China is set to “gradually raise” its retirement age for the first time since the 1950s. This decision comes as the nation grapples with an ageing population and a shrinking pension budget.
On Friday, the nation’s leading legislative assembly sanctioned measures to increase the legal retirement age for women in blue-collar positions from 50 to 55 and for women in white-collar roles from 55 to 58.
Men are set to experience an increase from 60 to 63.
China’s retirement ages rank among the lowest globally.
Chinese state media reported that a plan approved on Friday will implement changes starting 1 January 2025, with retirement ages gradually increasing every few months over the next 15 years.
According to a report by state news agency Xinhua, individuals will only be permitted to retire after the statutory age. However, people can postpone their retirement for a maximum of three years.
Beginning in 2030, workers will be required to increase their contributions to the Social Security system to qualify for pension benefits. To be eligible for their pensions, two thousand thirty-nine individuals must accumulate 20 years of contributions.
In a 2019 report, the Chinese Academy of Social Sciences, a state-run institution, projected that China’s primary state pension fund would deplete its resources by 2035. This estimate was made before the economic impact of the COVID-19 pandemic, which significantly affected China’s financial landscape.
A recent report from Xinhua outlines a plan to raise retirement ages and modify pension policies, citing a thorough evaluation of factors such as average life expectancy, health conditions, population demographics, education levels, and workforce availability in China.
The announcement has sparked scepticism and discontent among users on the Chinese internet.
“In the coming decade, we can expect another piece of legislation that could push the retirement age to 80,” a user commented on the Chinese social media platform Weibo.
“This year has been marked by significant challenges.” Middle-aged employees are encountering reductions in their salaries alongside increases in the age at which they can retire. “Individuals facing unemployment are encountering greater challenges in securing employment,” another participant remarked.
Some individuals expressed that they had expected the announcement.
“This outcome was anticipated, leaving little room for further discussion.”
In most European nations, the retirement age for men is typically set at 65 or 67, whereas women generally retire at the age of 60. “This is set to become the trend in our country, too,” remarked a user on Weibo.
In 2023, China experienced a significant demographic shift, marking a second consecutive year of population decline, driven by a continuing decrease in birth rates.
Officials reported earlier this year that the average life expectancy has increased to 78.2 years. The World Health Organization reports that by 2040, nearly one-third of China’s population, approximately 402 million individuals, will be over 60, a significant increase from 254 million in 2019.
Emerging demographic crisis
As our correspondent Laura Bicker reported earlier this year, a decelerating economy, diminishing government support and a prolonged one-child policy have contributed to an emerging demographic crisis in China.
China faces a looming crisis as its pension fund dwindles, raising urgent concerns about the nation’s ability to support its increasing elderly population.
In the coming decade, approximately 300 million individuals aged between 50 and 60 are poised to exit the workforce in China. This demographic represents the largest age group in the country, with numbers approaching those of the entire US population.
