The relationship between monthly income and pension saving habits in Kenya demonstrates a stark correlation: as earnings rise, the likelihood of securing a retirement plan increases significantly.
Financial security in retirement appears to be a privilege largely accessible to higher income brackets, while those in lower earning categories face substantial challenges in setting aside funds for the future.
For the highest earners—those bringing in over Sh500,000 monthly—compliance with pension savings is exceptionally high, with 89% contributing to a scheme and only 11% opting out. This trend of high participation remains strong in the 300,001 to 500,000 bracket, where 82% save, and the 100,001 to 300,000 bracket, which sees a 79% participation rate. These figures suggest that when disposable income is sufficient, workers prioritize long-term security.
However, a critical tipping point occurs within the middle-income tier. In the 50,001 to 100,000 shilling range, saving behavior drops notably to 56%, leaving 44% without pension coverage.
The disparity becomes alarmingly clear in the lower income bands. For those earning between 30,001 and 50,000, the majority (55%) do not save for retirement.
The situation is most acute for workers earning less than 30,000 shillings; in this demographic, a staggering 73% have no pension savings at all, with only 27% managing to contribute. This data highlights a clear divide where lower wages act as a barrier to entering the pension system, leaving the most vulnerable workers with the least protection for their post-retirement years.
