Hong Kong advocacy group proposes using pension savings for home purchases

A Hong Kong advocacy group has urged the government to let residents use a portion of their mandatory pension savings for home purchases, one of several proposals submitted ahead of the policy address later this month.

The Federation of Public Housing Estates noted on Wednesday that recent cuts to administration fees for the Mandatory Provident Fund (MPF) – the city’s compulsory retirement scheme – would generate higher savings for its 4.8 million members, making this an ideal time to relax withdrawal restrictions.

“Offering flexibility in using the Mandatory Provident Fund will be especially helpful to young families under 40 who wish to buy homes,” chairman Man Yu-ming said.

Vice-chairman Scott Leung Man-kwong, who is also a lawmaker, suggested allowing withdrawal of partial pension savings for buying homes to strike a balance between home ownership and retirement protection.

“The sum may not cover the down payment, but it can help offset expenses. We believe that the proposed measure could help homebuyers, especially those with more pension savings,” he said.

Leung noted that Singapore allowed residents to withdraw a proportion of their pension to buy homes under certain conditions, while requiring them to refund their accounts if they sell their properties.