In response to an ageing population and an underfunded pension system, China is preparing to “gradually raise” its retirement age for the first time since the 1950s.
The current retirement age in China is among the lowest globally, but the country’s top legislative body approved plans to increase it on Friday. Women in blue-collar jobs will see their retirement age rise from 50 to 55, while those in white-collar jobs will go from 55 to 58. For men, the retirement age will shift from 60 to 63.
This new policy will take effect starting January 2025 and will be rolled out in stages, with retirement ages gradually increasing every few months over a 15-year period, as reported by Chinese state media. Early retirement will be prohibited, though people can delay retirement by up to three years.
Additionally, from 2030, workers will need to contribute more to the social security system to qualify for pensions, and by 2039, they will be required to have at least 20 years of contributions.
In 2019, the state-run Chinese Academy of Social Sciences predicted that the main state pension fund could run out of money by 2035, a forecast made even before the economic damage caused by the COVID-19 pandemic.
The decision to raise the retirement age and revise the pension system was based on various factors, including life expectancy, public health, population trends, education levels, and the supply of labour, according to Xinhua.
China’s population has declined for the second consecutive year in 2023, while average life expectancy has risen to 78.2 years.
The shrinking pension fund and an ageing population mean that China is racing against time to ensure it can support the rising number of elderly citizens. In the next decade, around 300 million people aged 50 to 60, a group nearly as large as the population of the United States, will exit the workforce.
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