- Up to 40 per cent of Kenyans are putting their savings on children’s education.
- About 30 per cent of savings are to start own businesses while 26 per cent are saving for emergency expenses.
Children education, capital to start business and emergency expenses top the reasons why Kenyans are saving money, a report by Old Mutual Group now says.
These are followed by savings for property (better homes), business expansion and cushion for the family in case of the demise of the breadwinner.
According to the report dubbed “ Old Mutual Financial Services Monitor (OMFSM)”, a study that provides comprehensive insights into the Kenyan financial landscape, up to 40 per cent of Kenyans are putting their savings on children’s education.
About 30 per cent of savings are to start own businesses while 26 per cent are saving for emergency expenses.
The least purposes for saving according to the report includes Christmas savings and buying specific items, weddings and funerals, at between two and one per cent.
This comes amid a worrying figure of up to 90 per cent (of Kenyans), who are said not to be confident with their retirement savings and many are banking on their children for support while others think the government will look after them.
Over 50 per cent of Kenyans own micro businesses, and 22 per cent are 'polyjobbers' according to the report, a term that refers to those earning extra income alongside their regular jobs, showcasing a robust hustling spirit.
However when it comes to retirement, currently, only 26 per cent of respondents indicated that they are actively saving for retirement (which is lowest among the markets surveyed).
Nearly 90 per cent of Kenyans lack confidence in having sufficient retirement savings, according to Old Mutual.
"Instead, many rely on the hope that their children will provide support in old age, with only a small percentage expecting government assistance," the report states.
The report is derived from face to face interviews with individuals from different parts of the country.
It targeted people in both informal and formal sectors in urban and per-urban areas, with monthly incomes of Sh12,ooo and above.
The report highlights Kenyans' top financial priorities as income security, expense reduction,and debt repayment.
The study revealed a notable prevalence of personal debt in the country, where almost seven in 10 consumers have a personal loan of some form, higher than that in the other markets surveyed across the continent (Ghana, Namibia, and South Africa).
The high cost of living and limited disposable income is seen as a major hindrance to saving.
Close to half of Kenyan consumers are considerably financially stressed with only one in 10 earning more now than they did prior to Covid-19, the report indicates.