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RETIREMENT

Majority of Kenyans lack retirement plan - survey

According to the survey, Kenyans cited the available pension schemes are too costly.

In Summary

• Survey shows 38 per cent of Kenyans cannot afford to set aside any money for pension.

• 12 per cent are not interested in setting money aside for when they retire.

Elderly persons queue outside for their pension
PENSIONERS: Elderly persons queue outside for their pension
Image: FILE

Only one in 10 Kenyans belongs to an individual pension scheme other than the National Social Security Fund which is compulsory.

A survey by Infotrack Research & Consulting shows most Kenyans don’t believe there are viable pension schemes that meet their needs.

This has pushed retirees to rely on inheritance, savings and investments to meet their post-employment financial needs.

 

“Owing to the rise in the national incidence of poverty, the provision and care that Kenyans can provide to elderly citizens is severely limited by the low incomes,” Devolution CS Eugene Wamalwa said.

Speaking at the County Pension Fund’s (CPF) 90th anniversary celebrations, Wamalwa said retired persons who held employment with reasonable incomes are now unable to maintain their standards of living due to the lack of proper retirement planning.

The survey shows that while 58 per cent of Kenyans intend to retire after hitting 60, the majority of them are not prepared or ready to think about retirement.

“Income will be from my own savings and support that I will be getting from my kids,” one of the respondents said.

The survey showed 38 per cent of Kenyan’s cannot afford to set aside any money for pension while 12 per cent are not interested in setting money aside for when they retire.

"It would be erroneous to think that social security is a luxury to be afforded only when growth has taken place or when countries have reached a certain level of per capita income,” Wamalwa said.

At least 84 per cent of Kenyans are unaware of any registered umbrella/group pension schemes in Kenya offered by the different pension scheme/plan service providers.

 

According to the survey, Kenyans cited the available pension schemes are too costly adding that there was a lack of readily available information in the market.

Respondents cited the Government not doing enough to increase uptake of pension among young people and high levels of corruption in the country’s financial institutions as key hindrances for growth in pensions.

“Since pensions are based on the levels of contributions through the life course, we must innovate novel ways to reach the youth, the majority of who are not aware of pension plans and believe it is too soon to plan for retirement,” Infotrak CEO, Angela Ambitho said.

Releasing the survey, CPF CEO, Hosea Kili, said the threat of old-age poverty is growing meaning that the majority of Kenyans will have to hustle for the rest of their lives to survive and support their lifestyles because they lacked a pension plan.

“Levels of pension savings are poorest among the youngest working age groups meaning that the poverty trap will explode in the next few decades,” he said.