China is to “gradually raise” its retirement age for the first time since the 1950s as the country grapples with an ageing population and shrinking pension budget.

The top legislative body on Friday approved proposals to raise the legal retirement age from 50 to 55 for women in blue-collar jobs, and from 55 to 58 for women in white-collar jobs.

For men, the life expectancy will increase from 60 to 63.

Current retirement ages in China are among the lowest in the world.

Under the plan adopted on Friday, the change will take effect from January 1, 2025, with the respective retirement ages increasing every few months over the next 15 years. according to Chinese state media.

According to the state news agency Xinhua, it is not allowed to retire earlier than the legal age, but people are allowed to postpone their retirement for up to three years.

From 2030, employees will also have to contribute more to the social security system in order to receive a pension. In 2039, they will have to contribute for 20 years to access their pension.

The Chinese Academy of Social Sciences, a state-run organization, predicted in 2019 that the country’s main state pension fund would run out of money by 2035. That was an estimate before the Covid-19 pandemic hit China’s economy hard.

The plan to raise the retirement age and adjust pension policies was based on “a comprehensive assessment of China’s average life expectancy, health status, population structure, education level and labor supply,” Xinhua reported.

But the announcement sparked skepticism and discontent on the Chinese internet.

“In 10 years, there will be another bill that will postpone retirement until we are 80,” wrote one user on the Chinese social media site Weibo.

“What a miserable year! Middle-aged workers are facing pay cuts and higher retirement ages. The unemployed are finding it increasingly difficult to find a job,” said another.

Others said they had been expecting the announcement.

“That was to be expected, there is not much to discuss.

“Men in most European countries retire at 65 or 67, while women do so at 60. This will also become the trend in our country,” said a Weibo user.

China’s huge population declined for the second year in a row in 2023 as the birth rate continues to fall.

Meanwhile, the average life expectancy increased to 78.2 yearsofficials said earlier this year. Nearly a third of China’s population — about 402 million people — will be over 60 in 2040, up from 254 million in 2019, according to the World Health Organization.

A slowing economy, shrinking government benefits and a decades-long one-child policy have led to a creeping demographic crisis in China, our China correspondent Laura Bicker wrote earlier this year.

China’s pension pot is running out and the country has less and less time to build up a large enough fund to care for its growing elderly population.

Over the next decade, some 300 million people now in their 50s and 60s will leave China’s labor force, the country’s largest age group, nearly equal to the size of the U.S. population.

So who will take care of them? The answer depends on where you go and who you ask.

Read our analysis here