As the world celebrates International Women’s Day on 8 March, it’s an ideal time to raise awareness of the financial challenges female expats in Hong Kong face in 2024.

From the gender pay gap to the longevity risk, some financial issues affect women significantly more than their male counterparts. 

And yet, if you’re experiencing these issues, there are steps you can take to improve your financial situation.

If you’re a female expat living in Hong Kong, here are five financial issues that could be affecting you, and what you can do about it. 

1. Career breaks and part-time work can lead to a reduced retirement income

Research published by HRM Asia has revealed that women holding top jobs in Hong Kong were paid one-fifth less than their male counterparts in 2022, representing a gender pay gap of 19.6% compared to just 6.98% five years before.

While many factors contribute to the gender retirement gap, pay and working hours have a significant impact.

Taking a career break or working part-time to care for your children or elderly relatives could affect your salary and consequently reduce your pension contributions.

As a result, you might receive a lower retirement income than your male counterparts who may not have experienced such career interruptions. 

You could reduce this gender retirement gap and prepare for your future financial wellbeing by starting to save as early as possible and ensuring that you save consistently.

By giving your savings as much time as possible to grow, they could benefit from the effect of compounding – earning interest on interest already accrued. 

Additionally, if you or your partner can continue making contributions to your pension during any career breaks you take, this could allow you to build the savings you need for a comfortable retirement.

2. Women typically live longer than men, so they may need to plan for a longer retirement

Women tend to outlive men around the world. Figures published in Our World in Data found a five-year difference in life expectancy between men and women globally in 2021.

As a result, women face a greater risk of outliving their retirement savings than men. This is often referred to as “longevity risk”.

Additionally, living longer could mean that you face more years of potential inflation and increased healthcare costs in your later years. 

So, it’s important that you factor your life expectancy into your retirement planning. For example, you could increase your retirement savings by maximising your pension contributions while you’re still working. 

It might also be wise to create an estate plan to ensure that you’re taken care of later in life and that your assets are distributed in line with your wishes after you die. This may be especially important if you become widowed.

3. Female expats may need private healthcare to meet their medical needs

While expats may be entitled to access the state health insurance system in Hong Kong, private health insurance could provide invaluable peace of mind that you’ll have access to quality healthcare when you need it. 

Private healthcare might feel more important while you’re living away from home, where you might have felt more comfortable relying on the public health system. 

According to research published by Pacific Prime Hong Kong, breast cancer is the most common cancer in Hong Kong. One sad but stark statistic is that, in 2020, 13 women were diagnosed with this disease every day.

In private facilities, the cost of breast cancer medication alone cost between HKD $200,000 and HKD $800,000 a month for one patient in 2023. And that’s before you take into account costs for diagnosis and treatment such as mammograms, mastectomy, chemotherapy, and radiation therapy.

Unsurprisingly, investing in long-term private health insurance (and potentially life and disability insurance) is often paramount for many female expats. You might also want to consider setting aside savings specifically for potential healthcare needs in the later stages of life. 

4. Getting divorced could have a significant impact on a woman’s financial future

Research published by China Europe International Business School has revealed that divorce rates in Hong Kong increased 75% between 2010 and 2019. 

Divorce rates may also be higher for expats, whose busy lifestyles can contribute to couples drifting apart.

If you do get divorced and receive an unfavourable settlement, this could have a significant detrimental effect on your financial future.

So, it might be prudent to speak to a financial planner to understand all the financial implications of getting divorced and create a plan for the future.

5. Risk-aversion may lead to lower investment returns for women

Research published by the Harvard Business Review has found that compared to men, women typically take fewer risks when choosing investments.

While this can lead to more stability, it may also result in lower returns over the long term. 

So, if you feel that you may be too risk-averse when it comes to your investment portfolio, consider seeking help from a financial professional. Balancing risk is a crucial part of investing, but it can be tricky, especially if you’re a beginner.

A financial planner can help you understand your attitude to risk and adapt your investment strategy to align with your long-term financial goals.

They can also provide tailored advice that meets your unique needs as a female expat in Hong Kong.

Get in touch

If you want to overcome the financial challenges you’re currently facing and create a plan that aligns with your financial goals, we can help.

Please get in touch by email info@bmpwealth.com or call +852 3975 2878.