TDRI says 30-year savings system still leaves elderly Thais poor, urges auto-enrolment

Thailand’s retirement savings system has failed to provide sufficient financial security for much of its elderly population despite being developed for more than three decades, according to the Thailand Development Research Institute (TDRI).

Around 30% of elderly Thais now receive incomes below the national poverty line, while almost nine in 10 have little or no money saved for retirement, the institute found.

The findings were presented in TDRI’s report, Retiring Happily Requires Preparation: Thailand’s Retirement Welfare System, which highlighted the continuing dependence of older people on their families, employment and state support.

Thailand has introduced numerous savings and pension mechanisms over the years, but participation remains limited, particularly among informal workers who make up a large share of the country’s workforce.

Nearly half of elderly Thais have no savings

A national survey of the elderly found that 45% had no savings at all.

A further 44% had accumulated no more than 200,000 baht, meaning that almost nine in 10 older people had either no savings or only a relatively small financial buffer.

The lack of savings has left many elderly people dependent on income from their children. About 36% named financial support from their children as their principal source of income, a proportion that has barely changed in more than a decade.

More than 30% continued working after reaching retirement age. Nearly half of those still in employment reported that they were working because they needed money for daily living rather than because they had chosen to remain economically active.

Few receive pensions or income from savings

Less than 10% of elderly Thais rely mainly on a pension, retirement gratuity or personal savings.

Another 14% depend primarily on the government’s elderly living allowance, which currently provides between 600 and 1,000 baht per month.

TDRI noted that this amount was substantially below both the cost of living and the national poverty threshold.

More than 10% of elderly people earn less than 20,000 baht over an entire year.

Thailand’s poverty line stood at 3,078 baht per person per month in 2024, equivalent to about 37,000 baht annually. Based on these figures, an estimated 30% of elderly Thais have annual incomes below the poverty line.

Only about one-quarter receive more than 100,000 baht a year.

Savings incentives reach only a minority

Thailand already offers a broad range of retirement savings tools, including provident funds, retirement mutual funds, super savings funds, Thai ESG funds, pension insurance and the National Savings Fund.

However, participation in these schemes remains low.

Thailand had about 40 million workers in 2024, but only 12.4 million people, or around 30% of the workforce, filed personal income tax returns.

As a result, tax deductions designed to encourage retirement investment benefit only a limited proportion of workers.

The measures are particularly ineffective for informal workers, many of whom have incomes outside the personal income tax system and therefore gain little or no benefit from tax-based incentives.

Financial knowledge has not led to long-term planning

TDRI found that Thai people generally displayed a reasonably good level of financial knowledge, but this had not translated into effective long-term savings behaviour.

Around 86% had either not drawn up a retirement savings plan or were unable to follow the plan they had made.

Another 77% had emergency savings sufficient to cover no more than six months of expenses.

The figures point to financial vulnerability beginning during people’s working lives and carrying through into retirement.

Without sufficient emergency reserves or regular long-term savings, workers face a greater risk of entering old age without adequate income.

TDRI proposes automatic enrolment

TDRI argued that Thailand did not necessarily need to create another retirement savings programme.

Instead, it should focus on increasing participation in schemes that already exist.

One proposal is an automatic-enrolment system under which employers or the government would place workers into retirement savings programmes by default.

Individuals who did not wish to participate would retain the right to opt out.

The approach would reverse the present system, in which workers must take the initiative to register themselves, and could help increase coverage among people who otherwise postpone or neglect retirement planning.

TDRI also recommended promoting savings from school age and developing financial-planning tools tailored to informal workers.

Such measures could help people begin saving earlier and provide workers outside the formal employment system with a more dependable source of income in retirement.

Ageing population poses fiscal challenge

The report concluded that Thailand’s central problem was not a lack of retirement savings products.

Rather, too many people had either failed to begin saving or were putting aside insufficient amounts.

This has left a large proportion of the elderly dependent on relatives and government welfare at a time when Thailand is becoming a fully aged society.

Without wider participation in retirement savings, the problem could weaken elderly people’s quality of life while placing mounting pressure on families and the government’s long-term fiscal position.