China to raise retirement age for first time since 1950s

China is set to slowly increase its retirement age for the first time in over six decades as the nation tackles issues related to an aging population and a shrinking pension fund.

On Friday, the main legislative authority gave the green light to plans to increase the official retirement age for women. For those in blue-collar positions, the retirement age will rise from 50 to 55, while for women in white-collar roles, it will go up from 55 to 58.

Men can expect an increase from 60 to 63.

China has some of the lowest retirement ages globally.

As per the plan approved on Friday, the adjustments will take effect starting January 1, 2025. Retirement ages will gradually increase every few months over the next 15 years, as reported by Chinese state media.

According to the state news agency Xinhua, retiring before the official age will not be permitted. However, individuals have the option to 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 retirement benefits. By 2039, they will need to have contributed for a total of 20 years in order to be eligible for their pensions.

In 2019, the government-operated Chinese Academy of Social Sciences warned that the primary state pension fund in the country could be depleted by 2035. This prediction was made before the economic impact of the Covid-19 pandemic, which significantly affected China's financial situation.

According to Xinhua, the decision to increase retirement ages and modify the pension system was founded on a thorough evaluation of various factors, including average life expectancy, health status, demographic trends, educational levels, and the availability of workers in China.

However, the announcement has sparked some skepticism and unhappiness on Chinese social media.

"A user commented on the Chinese social media platform Weibo, predicting that in the next decade, another legislation will push back the retirement age to 80."

"What a tough year it has been! Workers in their middle years are dealing with salary reductions and longer retirement timelines. Meanwhile, those without jobs are struggling more than ever to find work," someone else added.

Some people mentioned that they had expected the announcement.

"This was anticipated, and there isn't a lot to talk about."

"According to one user on Weibo, men in many European nations typically retire at ages 65 or 67, while women retire at 60. They believe this pattern will also emerge in our country."

In 2023, China's large population experienced a decline for the second year in a row, due to a continuing decrease in the birth rate.

In the meantime, officials reported earlier this year that the average life expectancy has increased to 78.2 years. The World Health Organization predicts that by 2040, nearly one-third of China's population, which is approximately 402 million individuals, will be over the age of 60, a significant jump from 254 million in 2019.

According to our correspondent Laura Bicker, earlier this year, China's economy is slowing down, government support is decreasing, and the long-standing one-child policy is contributing to a growing demographic challenge in the country.

China's pension fund is depleting, and the nation is facing a pressing deadline to establish a sufficient financial reserve to support its increasing elderly population.

In the coming ten years, around 300 million individuals currently between the ages of 50 and 60 will exit the workforce in China. This demographic represents the nation's most significant age group, roughly comparable to the entire population of the United States.

So, who will take care of them? The response varies based on your location and whom you inquire with.

Check out our analysis here.