Thailand proposes retirement savings lottery to combat poverty

Thailand faces a growing issue of an ageing population entering retirement without sufficient savings. This problem is exacerbated by the country’s rapid transition into an aged society, and cannot be resolved merely through increased budget allocations for elderly allowances.

Deputy Finance Minister Paophum Rojanasakul announced that the Ministry of Finance is considering a new policy called the Retirement Savings Lottery. This innovative approach aims to leverage the Thai people’s fondness for gambling as a motivator for saving. Participants can withdraw their total lottery ticket purchases upon reaching the retirement age of 60.

The preliminary details of the policy, which may be subject to change, are as follows:

The National Savings Fund (NSF) will issue digital scratch-off lottery tickets priced at 50 baht (US$ 1.3) each. These will be available for NSF members, Section 40 insured persons, and informal workers. Individuals can purchase up to 3,000 baht (US$ 82) worth of tickets per month.

Tickets can be bought daily, but the lottery draws will take place every Friday at 5pm. Winners will receive their prizes immediately, while the money spent on tickets will be saved as retirement funds, irrespective of winning.

The prize structure for the Friday Draw includes:
1. Five first prizes of 1,000,000 baht (US$27,400) each.
2. 10,000 second prizes of 1,000 baht (US$ 27) each.

All lottery ticket purchases will contribute to the buyer’s savings, managed by the NSF. Upon reaching 60 years of age, participants can withdraw their accumulated funds, Paophum said.

“This policy aims to address the issue of elderly poverty in Thailand. Voluntary savings mechanisms currently in place are ineffective. We need a savings system tied to incentives.

“By purchasing legal lottery tickets, participants accumulate savings. Winners receive immediate payouts, while non-winners still save every baht for retirement. The more tickets bought, the greater the chances of winning and the higher the accumulated savings.”

The deputy finance minister noted that the policy is still in the process of fine-tuning and will require legal amendments, which may take six months to a year to complete. However, efforts will be made to expedite the process, reported Sanook.