China will allow retirees to take out bank loans against their homes to pay for their living expenses under a pilot programme in four cities, the Chinese insurance regulator said on Monday.

The programme is the latest government effort to help Chinese citizens aged 60 and above.

The city governments in Beijing, Shanghai, Guangzhou and Wuhan will start a two-year experiment from July 1, the China Insurance Regulatory Commission said in an online statement.

Reverse mortgages, which are common in developed countries but new in China, are extended to older citizens who use their homes as collateral to receive regular payments from insurers.

They help broaden financial resources for the elderly and expand the types of retirement services offered by insurers, the regulator said.

"The scheme provides a new way for old-age care," the regulator added.

China published a proposal for the pilot programme last year. Some experts are doubtful the programme can be effective as all private home ownership in the country is capped at 70 years. Traditionally, homes are also passed on to the next generation as inheritance.

Official figures show that in February, China had more than 200 million people over the age of 60, accounting for 15 percent of the total population.