Hong Kongers fleeing to Britain leave $5.1b trapped behind

HONG KONG – As China tightens its control over Hong Kong, a wave of residents is permanently relocating to the UK and leaving their retirement money trapped behind in the Asian financial hub.

Normally, anyone leaving Hong Kong on a long-term basis is entitled access to savings they have accrued in Hong Kong’s compulsory pension system, the Mandatory Provident Fund. But Hong Kongers who emigrate using a British National (Overseas), or BN(O), passport cannot use that to withdraw their money before the retirement age of 65, the Mandatory Provident Fund Schemes Authority (MPFA) said.

For those moving to the UK, not being able to access their pension money has palpable financial impacts. 

Recent cases include a woman who left in fear of repercussions from her role in protests and now has thousands of dollars trapped in her pension fund; a middle-aged man, born and raised in Hong Kong, who has vowed never to return and is shut out from his nest egg of more than US$60,000 (S$80,000); and another who is struggling to buy an apartment in the UK because his down payment is stuck on the other side of the world.

Emigration has been top of mind for many residents after Hong Kong’s government in March passed Article 23, a domestic security law that was fast-tracked at Beijing’s urging, and which has been harshly criticised by foreign governments for curbing fundamental freedoms. 

“With Article 23, there will be more people trying to leave Hong Kong, more people trying to get early withdrawals to build their new lives, and more denials,” said Ms Megan Khoo, research and policy adviser at British-based activist group Hong Kong Watch, which estimates that people who emigrated to the UK using the BN(O) passport have been denied access to more than US$3.8 billion in retirement savings since 2021. 

BN(O) passports give people born before Hong Kong was handed back to China in 1997 and their families the right to move to the UK and a pathway to full British citizenship, with more than 140,000 people using the emigration route since it was expanded by then British Prime Minister Boris Johnson in 2021. 

In the first quarter of 2024, applications for BN(O) passports were the highest in almost two years, doubling to 9,693 from the previous period, according to the most recent data from the UK government. 

Hong Kong’s Immigration Department referred Bloomberg News to the MPFA. 

Geopolitical tension

Since the UK handed Hong Kong back to China, the city has operated under a “one country, two systems” principle, meaning that the city is part of China but retains its own economic and social systems. In fact, the city’s mini Constitution requires the city to make its own law to protect national security, a mandate that has drawn controversy for decades. 

Democracy advocates have long feared that the law would restrict basic freedoms, and protests against it flared across the city from 2019 until Beijing imposed a national security law in 2020 that wiped out many activist groups. For some, that time marked a turning point and spurred them to hatch an escape plan. 

That was the case for Leo, a 56-year-old business owner who requested that his last name not be used. Born and raised in Hong Kong, he built up a successful food transport company but began to fear for the future after the 2020 security law. 

Leo moved to Manchester in 2022 on his BN(O) passport, and in March 2023 started the process of claiming the £50,000 (S$87,000) from his HSBC pension account in Hong Kong. The core issue, he said, is that the bank will not recognise his BN(O) passport as an official document that will allow him to access the cash. 

Although he should be able to withdraw the money when he turns 65, he needs the cash now and is concerned about the Hong Kong stock market, where the money is heavily invested in. The Hang Seng Index, which is composed of the largest companies that trade on the Hong Kong Stock Exchange, is down more than 39 per cent since a peak in February 2021.

An HSBC spokesperson said the bank follows the MPFA’s requirements for processing early withdrawals.

“In the case of permanent departure, scheme members are required to provide evidence of the right of abode outside of Hong Kong,” the spokesperson said. “The MPFA has publicly confirmed that a BN(O) passport cannot be used as such evidence.”

Fleeing crackdowns 

Others have left Hong Kong after their role in recent protests out of fear of repercussions. Kay, who requested that her last name not be used, moved to London using her BN(O) passport in September 2021, after watching fellow protestors face arrests and fearing for her safety. 

The 33-year-old, who works in technology, has pension money in accounts with both HSBC and Manulife, but both have denied her access to the cash, which totals about £2,500. Having those funds will ease her stress over paying rent and maybe even enable her to get a dog, she said. 

After two years of phone calls and bureaucratic headaches, she is ready to give up hope of getting the money before she turns 65. 

Chi, a 52-year-old who left Hong Kong in August 2022, is trying to buy a house in St Helens, a village near Manchester. But the money for his down payment – about £90,000 – is struck in his Hong Kong pension account with Manulife. 

A spokesperson for Manulife said that the insurer abides by relevant regulatory requirements.

Chi and his wife began to consider fleeing Hong Kong after the 2020 security law passed. He got a job in the UK as a picker at a warehouse, but is hoping that his pension money can help improve his family’s finances. 

“A lot of Hong Kongers rely on this fund, a lot have a lot of money built up in this,” said Hong Kong Watch’s Ms Khoo. “They need the money to start a new life and the government is blocking it.” Bloomberg