Seniors support remortgaging

Over 70 percent of senior citizens in Shanghai support plans for a pilot scheme to allow them to supplement their pensions by borrowing from banks and other financial institutions using their properties as collateral, Shanghai Municipal Statistics Bureau said Sunday.

The bureau interviewed 2,248 senior citizens across the city, about 59 percent of who were in their 60s and the rest in their 70s.

Under the "home for pensions" plan, residents over 60 could use their homes as collateral in return for a fixed sum every month, or to pay for care at a nursing home.

The State Council published a proposal on September 13 backing the use of such loans, also known as reverse mortgages, to supplement pensions. It encouraged local governments to launch pilot schemes as early as next year.

Though the idea of reverse mortgaging is at odds with traditional attitudes toward providing for old age, Shanghai residents are open to the new policy, Ren Yuan, a professor at Fudan University's School of Social Development and Public Policy, told the Global Times.

"Senior citizens in Shanghai are more open-minded and some of them are very stable financially," he said.

The bureau said the main objections among those surveyed who were against the plan were that properties should be left to their children, and that reverse mortgages are not necessary to ensure financial well-being in old age.

However, Ren said that while the majority surveyed accept the plan to allow reverse mortgages, it does not mean that the majority of senior citizens will actually take on reverse mortgages.

"I believe that senior citizens with properties and favorable pensions would consider pledging their homes for money," he said. "However, for those who are living with their kids or who have lower incomes, traditional home care is the more practical option."

In addition, of those surveyed, 67 percent said they favored home care, 21 percent pro community-based home care, and 11 percent nursing home care. Among seniors whose monthly pensions were between 3,000 yuan ($490) and 4,000 yuan, 20 percent said they would like to stay at a nursing home. For those with a pension of under 1,000 yuan, the figure was just 5 percent.