China Increases Retirement Age for the First Time Since the 1950s

September 13, 2024 — In a landmark move addressing its ageing population and dwindling pension resources, China has announced a gradual increase in the retirement age for the first time since the 1950s. This decision, approved by the country’s top legislative body on Friday, marks a significant shift in China's retirement policy.

China announces its first retirement age increase since the 1950s, effective January 2025.

Effective January 1, 2025, the new retirement age regulations will raise the statutory retirement age for women in blue-collar jobs from 50 to 55 years. Women in white-collar professions will see their retirement age increase from 55 to 58 years. For men, the retirement age will extend from 60 to 63 years. These changes will be implemented incrementally over the next 15 years, according to state media reports.

Currently, China has some of the lowest retirement ages globally. The updated policy will ensure that retiring before the statutory age is no longer permissible, although individuals will be allowed to extend their retirement by up to three years. Starting in 2030, employees will also be required to contribute more to the social security system to qualify for pensions. By 2039, workers will need to have made at least 20 years of contributions to access their pensions.

The Chinese Academy of Social Sciences had warned in 2019 that the country's main state pension fund could deplete by 2035—a projection made before the economic setbacks caused by the Covid-19 pandemic. The new policy aims to address the financial strain on the pension system and adjust to demographic changes.

The decision to raise retirement ages and modify pension policies follows a comprehensive assessment of various factors including average life expectancy, health conditions, population structure, education levels, and workforce supply, as reported by Xinhua.

China’s population has been declining for the second consecutive year in 2023, with a continued drop in birth rates and a rise in average life expectancy to 78.2 years. The policy shift has stirred mixed reactions among the Chinese public.

On social media platforms such as Weibo, some users have expressed skepticism and discontent. “In the next 10 years, there will be another bill that will delay retirement until we are 80,” one user commented. Another lamented, “Middle-aged workers are faced with pay cuts and raised retirement ages, while unemployed individuals find it increasingly difficult to secure jobs.”

Conversely, some users anticipated the change. “This was expected; there isn't much to discuss. Men in most European countries retire at 65 or 67, while women retire at 60. This will likely become the trend here as well,” a Weibo user noted.

Over the next decade, approximately 300 million people currently aged 50 to 60 will exit the Chinese workforce, a demographic roughly equivalent to the entire population of the United States. As China faces the challenge of managing its pension system with a growing elderly population, the need for effective solutions becomes increasingly urgent.

The implementation of these new retirement age regulations will be closely watched, as China grapples with the pressing issue of ensuring financial security for its ageing population. The ultimate success of this policy will hinge on how well it balances the needs of current and future retirees against the backdrop of a shifting demographic landscape.