Fidelity International and Ant Fortune have released a China retirement survey suggesting young adults have incompatible financial goals.

It appears that a large chunk of young Chinese adults want to square the circle: they aren't saving for the long term but want to quit the workforce before they hit their sixties.

Only 44 per cent of Chinese millennials have started saving for old age despite wanting to retire at around the age of 57, according to new research.

Fidelity International and Ant Fortune, a wealth management platform of Ant Financial, celebrated a new five-year partnership with the release of a China retirement survey called Helping Millennials Invest for the Future, to assess China’s retirement readiness. There were 28,440 respondents, all Ant Fortune users, and 75 per cent of whom were millennials (aged 18-34). 

Among the non-savers, the average age Millennials plan to start saving is 40, which means they only have 17 years left to save before reaching their ideal retirement age. According to the survey results, on average, Chinese millennials are saving RMB 1,339 (around $196) a month. The main barrier to saving is reported as “lack of capital”.

Insufficient financial literacy 
Chinese millennials expect that they will need at least RMB 1.63 million to have a comfortable retirement. Based on current saving levels and deposit interest rates, it would take about 59 years to reach their retirement goals without investing. Few have realised the importance of investing in order to reach their retirement saving targets. 

More than half of Chinese millennials responded that they would expect to simply use cash savings and the government pension as their main sources of retirement income.

Chinese millennials are also not very well-versed in effective retirement investment strategies. Less than one third prioritises long-term returns when purchasing retirement saving products.

“Our survey, conducted in partnership with Ant Fortune, indicates a greater opportunity for investor education around topics such as investment strategy for different life stages to help people achieve a better outcome in retirement,” said Daisy Ho, managing director, Asia ex-Japan at Fidelity International. “We hope that the young generation will realise the importance of saving, investment and [spending] time in making pension preparations. Fidelity International has a deep and rich heritage in pensions globally, and we are keen to share our experiences with the China market and help the young generation better prepare for their retirement.”

Guoming Zu, vice president, wealth management business group, Ant Financial said: “Everyone needs to pay attention to and plan for retirement in advance, especially as the population begins to age. This survey, carried out in collaboration with Fidelity International, gives a snapshot about awareness of retirement among China’s young generation and how prepared they are for retirement, which will also serve as a reminder to people about the critical role of retirement planning. We hope the survey can help boost these people’s awareness about retirement.”