How the public annuity creates a monthly retirement income
The HKMC Annuity Plan (the public annuity) is run by the government-owned HKMC Annuity Limited and lets people aged 60 or above exchange a lump-sum premium for guaranteed monthly income for life — in effect, turning a pot of savings into a lifelong monthly “pay cheque”. Eligible elderly may also claim government support such as the Old Age Living Allowance.
How does the public annuity work?
You pay a one-off premium (currently HK$50,000 to HK$5 million for an individual) and, from then on, receive a fixed, guaranteed monthly annuity for life. The amount depends on your age and sex at entry — the older you are, the higher the monthly payout tends to be. In principle it converts a pot of savings into a lifelong stream of income: you transfer longevity risk (the risk of living longer than expected and exhausting your savings) to the operator in exchange for steady, predictable cash flow. That stable monthly income can cover fixed costs such as utilities, food and rent, leaving your other assets more flexible. For how an annuity fits within an overall retirement portfolio, see annuity planning and the five pillars of retirement.
General description only; premium range and amounts are subject to HKMC Annuity Limited's announcements (2026).
Roughly how much does it pay?
Per HK$1 million of premium (illustrative; actual figures per official announcements):
| Entry age | Male (approx/month) | Female (approx/month) |
|---|---|---|
| Age 65 | ~HK$5,800 | ~HK$5,300 |
| Age 75 | ~HK$7,360 | ~HK$6,420 |
Example amounts per HK$1 million of premium, for reference only; actual payout rates, amounts and terms are subject to HKMC Annuity Limited (2026).
Who is it suitable for?
- Retirees with a lump sum who want steady lifelong income.
- Those worried about outliving their savings — the annuity pays for life.
- People who want to lock essential spending with an annuity and keep other assets flexible.
- Those who have roughly sized their monthly gap and understand the annuity only needs to cover fixed costs — estimate the gap first using the how much you need approach, then decide how much premium to commit.
How can the public annuity work alongside government allowances?
The public annuity is monthly income you buy with your own money, which is completely different in nature from a means-tested government allowance — the two can coexist and complement each other. In practice, an elderly person can first check whether they qualify for an allowance, then use an annuity to fill the remaining gap:
| Feature | Public annuity | Government allowance (e.g. OALA / CSSA) |
|---|---|---|
| Nature | Lifelong income bought with a premium | Needs-based government support |
| Means test? | No asset/income test — open to anyone eligible to apply | Subject to asset and income tests |
| Source of funds | Your own savings | Public funds |
| Effect on testing | Buying it may change your asset profile and affect an allowance assessment | Is itself the subject of testing |
After buying an annuity, your asset profile may change and could affect assessment for means-tested benefits such as the Old Age Living Allowance or CSSA; details and the latest criteria are subject to the Social Welfare Department (SWD) and official announcements. See also the Old Age Living Allowance, CSSA for the elderly and how annuities and insurance affect the OALA assessment.
What to watch out for
- Low flexibility: the money is a long-term commitment — don't use funds you may need soon.
- Inflation risk: the fixed monthly amount may lose real purchasing power over time, so weigh it alongside your retirement cash flow plan.
- It is not an allowance: this is income from your own money, unlike the means-tested Old Age Living Allowance.
- Assessment impact: buying it changes your asset profile and may affect means-tested benefits — understand the whole picture before deciding.
General education only, not personalised advice; for anything involving tax, benefit assessment or surrender terms, consult a licensed adviser for your situation or enquire with the Social Welfare Department.
How can you weigh it up step by step before applying?
- Step 1: Work out fixed monthly costsList essential monthly costs — utilities, food, rent, medical — to arrive at the target amount the annuity needs to cover; the how much you need framework can help here.
- Step 2: Take stock of other incomeDeduct income you already have (MPF withdrawals, rent, other annuities or interest) to find the monthly gap the annuity still needs to fill, so you don't over-commit and sacrifice liquidity.
- Step 3: Check government allowance eligibilitySee whether you qualify for the Old Age Living Allowance or CSSA, and note that a changed asset profile after buying may affect the assessment — the latest criteria are per official announcements.
- Step 4: Keep an emergency and flexibility bufferMake sure you still hold a readily accessible reserve for unexpected costs, then consider committing the remainder, so the annuity becomes part of a stable cash flow rather than your only plan.
These are general educational steps, not personalised advice; if you would like analysis for your situation, see how we help or reach the team via WhatsApp.
Sources
The official information cited above can be verified at the sources below; the latest official publication always prevails.
Related reading
Frequently asked questions
How is the public annuity different from the Old Age Living Allowance?
The public annuity is lifelong income you buy with a premium — open to anyone eligible to apply; the Old Age Living Allowance is a means-tested government allowance subject to asset and income tests. They are different in nature and can coexist; see our Old Age Living Allowance article for the latter.
Can I get my principal back?
There are death-benefit arrangements, but it is generally a long-term commitment with limited flexibility; review the guaranteed period, death benefit and surrender terms, and weigh the impact on your liquidity before applying.
Is the return high?
Its strength is stability and a lifelong guarantee, not a high return; the actual internal rate of return depends on your longevity — the longer you live, the higher the overall return tends to be. It suits being part of a stable cash flow, not your only plan.
Will buying the public annuity affect my government allowance?
It may. After buying, your asset profile could change and affect assessment for means-tested benefits such as the Old Age Living Allowance or CSSA. Understand the whole picture before deciding; the latest criteria are subject to the Social Welfare Department and official announcements, and you can also read how annuities and insurance affect the OALA assessment.
How does the public annuity differ from a private insurer's annuity?
The public annuity is run by the government-owned HKMC Annuity Limited with relatively uniform terms; private annuities offer a wider range of products and choices. Each has its use cases, so compare against your own goals and liquidity needs — see annuity planning.
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