NationThailand-Nov 2
Thailand is ageing faster than its income can support, and most workers are unprepared for retirement, according to Dr Pipat Luengnaruemitchai, chief economist at Kiatnakin Phatra Financial Group (KKP). He urged individuals to take responsibility for their own financial planning. Speaking at a media briefing on Monday (November 2), Dr Pipat said about 24 per cent of Thais are already over 60, a share expected to rise to roughly one in three within 25 years. KKP’s presentation, drawing on UN data, put the figure at 36 per cent by 2049. The number of workers per older person is projected to fall from 5.5 to 1.8 by 2060. What worries him most, Dr Pipat said, is that Thailand is older than its income suggests. The median age is about 41 years, similar to China’s, yet GDP per capita is only about US$7,200, roughly half of China’s. Most countries with a similar age profile are considerably richer and have stronger social safety nets. The economic backdrop adds to the strain. Thailand is the only ASEAN economy whose population is shrinking, he said, and he expects growth of around 2.5 per cent this year. Even after revisions, he said, this would still make Thailand the slowest-growing economy in Asia, while Taiwan, Vietnam and Malaysia are expanding far faster. Surveys suggest Thais are poorly prepared, he said. A Society of Actuaries Research Institute poll of 750 private-sector employees found that 86 per cent expect to retire as planned, but only 5 per cent actually do. Some 73 per cent reach retirement with less than 60 per cent of what they need. Pension coverage is limited. Dr Pipat said only about 3.1 million people belong to provident funds, out of a labor force of roughly 50 million, or under 10 per cent. Many workers rely on social security alone, which he said pays at most 5,000 to 7,000 baht a month for those who contribute throughout their working lives. Around 70 per cent of the income of Thais over 60 comes from their children or from continuing to work, while only about 7 per cent depend on retirement savings. That model will become harder to sustain, he warned, as each worker must support more older people. The state is unlikely to fill the gap, he said. Read more at:
