China’s legislature passed a policy which will see retirement age raised for both men and women for the first time since the 1950s as it tries to tackle a shrinking and ageing population.
China will begin raising the retirement age for the first time in more than 70 years as the 1.4bn-strong country faces a shrinking and ageing population.
China’s legislature, known as the Standing Committee of the National People’s Congress, has signed off a new policy which will see retirement age rise for both men and women as of January 2025, state broadcaster CCTV announced.
Over 15 years, the retirement age for men will be raised from 60 to 63 and for women, who can currently retire at 50 if they are in blue-collar employment or 55 if they have white-collar jobs, will retire either at 55 or 58 years, depending on the work they do.
The policy will be rolled out progressively based on people’s birthdates.
Having people work for longer would ease pressure on pension budgets with many Chinese provinces already reeling from large deficits.
Eleven of China’s 31 provincial-level jurisdictions are running pension budget deficits, finance ministry data show. The state-run Chinese Academy of Sciences said the pension system would run out of money by 2035 without further reform.
“We have more people coming into the retirement age, and so the pension fund is [facing] high pressure. That’s why I think it’s now time to act seriously,” said Xiujian Peng, a senior research fellow at Victoria University in Australia who studies China’s population and its ties to the economy.
The previous retirement ages were set in the 1950s, when life expectancy was only around 40 years, Mr Peng said.
The policy was passed as China faces a looming demographic disaster amid a shrinking and ageing population.
Analysts predict there will be 500 million people over the age of 60 in China by 2050.
That is on top of fewer births, as younger people opt out of having children, citing high costs.