Prudential survey reveals 80% of fathers in Hong Kong do not expect financial support from their children in retirement

Over 90% plan to leave their legacy to the next generation, accounting for two-thirds of their wealth on average

(17 June 2021, Hong Kong) Four out of five (80%) fathers in Hong Kong do not expect to receive financial support from their children when they retire, according to findings in the latest survey^[1] about family financial planning announced by Prudential Hong Kong Limited (“Prudential”) today.

The findings also revealed that 60% of dads are worried about their children’s financial future. Over 90% are planning to leave their legacy to the next generation, accounting for about two-thirds of their wealth on average. Fathers are also concerned about declining wealth or failure to pass on wealth to their children in the future. As a result, they tend to accumulate and grow their wealth by purchasing insurance plans.

Hong Kong dads hope their children live independently with stable jobs

As Father’s Day approaches, Prudential interviewed a group of customers who are also fathers. The findings revealed that 80% of fathers surveyed do not expect to receive financial support from their children in retirement, and a vast majority do not expect their children to live with them after marriage (93%). When asked what they would hope their children to have accomplished by the age of 30, most dads said they would like their children to have a stable job (78%), have a life partner (44%), own a property (43%) and have financial freedom (43%).

Since Hong Kong dads do not wish to rely on their children financially, they tend to set aside wealth for their own use after retirement. On average, respondents estimated that they would need to set aside HK$4.6 million for retirement, when their average monthly retirement expenses would be approximately HK$17,000. However, 61% of respondents were not very confident about achieving this retirement savings goal or leading a comfortable retirement life.

60% of Hong Kong dads worry about the financial future of their children; majority of them rely on insurance plans to protect against risks

These fathers had evidently changed their attitudes towards financial planning after becoming parents. Nearly 60% ranked family as their top priority in life, significantly higher than before they became fathers (31%). Specifically, they are more frugal and cautious when it comes to spending (64%); more meticulous in managing income and expenditure, such as recording expenses for future review (45%); and more conservative when making investment decisions (40%).

60% of fathers also expressed concern over insufficient funds for their children’s education or living expenses. Most of them (94%) plan to pass on two-thirds of their wealth to their children on average, mostly through deposits (80%), insurance plans (75%) and property (73%). 20% even intend to pass on their wealth as soon as their children have families. However, they are worried about wealth depreciation or failure to pass on their wealth due to huge medical expenses from major illnesses (37%), unemployment or loss of income source (18%), and investment failure (18%).

With so many uncertainties about the future, 68% of fathers have purchased insurance plans (such as savings, medical, critical illness and life protection), as well as implemented more prudent financial management strategies, such as maintaining sufficient liquid assets (44%), buying low-risk investment products (31%) and purchasing real estates (31%) to ease their concerns.

Many of the respondents said that they would learn how to invest and manage their wealth if they could turn back the clock by ten years. They also advise their children to live within their means and manage risks with prudent financial planning.

“As society evolves, the traditional concept of ‘raising children to protect the elderly’ is gradually weakening,” said Derek Yung, Chief Executive Officer at Prudential. “We understand that Hong Kong parents care much about their children and would do whatever possible to help them become independent at an earlier stage of life. On the other hand, they strive to take care of their own retirement life so their children can be hassle-free.”

Mr. Yung added, “At Prudential we advocate the concepts of retirement and legacy planning, and wealth management has always been one of our key areas of focus. We are pleased that respondents see insurance plans as a means to provide long-term wealth protection and accumulation to help them pass on their legacy to the next generation seamlessly.”

In light of Hong Kong’s aging population and increasing medical expenses, Prudential is committed to providing assistance to customers as they prepare for different life stages, in order to help them accomplish three major goals of “wealth accumulation”, “wealth protection” and “wealth inheritance”.

At the end of March, Prudential launched “Evergreen Wealth Protector”, a long-term savings protection plan designed to help customers accumulate wealth and prepare for their family financial needs in a simple, flexible way. Apart from guaranteed cash value and non-guaranteed terminal dividend, the plan provides protection against cancer*. If the insured is unfortunately diagnosed with cancer, an additional lump-sum will be offered while the plan’s value remains the same. The life assured can also be changed an unlimited number of times within 100 years, ensuring the policy’s coverage and value can be passed down, empowering a secured financial future for generations.

For more information about “Evergreen Wealth Protector”, please refer to the official website of Prudential Hong Kong Limited: https://www.prudential.com.hk/en/savings-insurance/whole-life-savings/evergreen-wealth-protector/

* For full terms and conditions, and risk disclosures of the relevant insurance plan, please refer to relevant product brochure and policy document and read carefully.

[1] A total of 624 Prudential customers from Hong Kong were interviewed through an online survey during May – Jun 2021, of which 163 are fathers.

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About Prudential Hong Kong Limited

Prudential has been serving the people of Hong Kong since 1964. Through Prudential Hong Kong Limited and Prudential General Insurance Hong Kong Limited, we provide a range of financial planning services and products including individual life insurance, investment-linked insurance, retirement solutions, health and medical protection, general insurance and employee benefits.

Prudential plc is an Asia-led portfolio of businesses focused on structural growth markets. The business helps people get the most out of life through life and health insurance and retirement and asset management solutions. Prudential plc has 17 million life customers in its Asia and Africa businesses and is listed on stock exchanges in London, Hong Kong, Singapore and New York.

Prudential plc is not affiliated in any manner with Prudential Financial, Inc. a company whose principal place of business is in the United States of America, nor with The Prudential Assurance Company Limited, a subsidiary of M&G plc, a company incorporated in the United Kingdom.Prudential plc is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America or with the Prudential Assurance Company, a subsidiary of M&G plc, a company incorporated in the United Kingdom.

Please visit www.prudential.com.hk for more information.