China’s greying population is refusing to save for retirement

Hongbaos areira usually reserved for special occasions, such as birthdays, weddings and the Chinese mid-autumn festival, which got under way on September 29th. But now these red envelopes, stuffed with cash, are part of a push by China’s banks to get citizens thinking about retirement. They are being offered to customers who register for private-pension accounts.Under a law introduced last November, workers may set aside savings in tax-deferred accounts accessible upon retirement, much like America’s Individual Retirement Accounts (s). Those who want to enrol must open an account with a bank, before allocating their deposits to a licensed wealth manager. Savers can deduct contributions from taxable income; they pay no tax on capital gains and only a 3% tax rate at the time of distribution.