Sharp Daily
No Result
View All Result
Monday, June 23, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Investments

Kenya’s retirement savings crisis

Hezron Mwangi by Hezron Mwangi
December 23, 2024
in Investments
Reading Time: 2 mins read

Retirement is a phase of life meant for rest and reflection, yet for many Kenyans, it is marked by financial strain. Despite the increasing awareness of the importance of retirement planning, the statistics paint a grim picture. according to the Public service superannuation scheme, only 25.0 % of Kenyans actively contribute to a pension scheme translating to 3.5 million Kenyans, leaving the majority without a reliable source of income during their retirement years.

On average, retirees in Kenya require at least KES 14,800.5 per month to cover basic living expenses. However, the average monthly pension contribution stands at just KES 2,400.7 according to the Retirement Benefits Authority (RBA) report of 2023, creating a significant gap between what is needed and what is saved. This shortfall forces many retirees to depend on family support or continue working in their old age.

The informal sector, which accounts for 83.5% of the workforce, faces the greatest challenge. Workers in this sector often lack access to structured pension schemes and rely on inconsistent earnings to save for their future. Efforts like the Mbao Pension Plan have been introduced to encourage informal workers to save small, manageable amounts, but uptake remains low due to economic pressures and limited financial literacy.

This lack of adequate savings not only affects individuals but also has broader economic implications. Retirees who are financially insecure often become dependent on younger generations, straining family resources and perpetuating intergenerational poverty. Additionally, a lack of savings reduces retirees’ purchasing power, slowing economic growth.

RELATEDPOSTS

Taxation Benefits paid by retirement benefits scheme

April 13, 2024

Addressing this crisis requires a multifaceted approach. Increased public awareness about the importance of retirement planning, more inclusive pension schemes, and government incentives for saving could make a significant difference. Additionally, tailored financial products for the informal sector are essential to ensure more Kenyans can save consistently, regardless of their income level.

Kenya must prioritize creating a sustainable retirement framework. A future where retirees can live with dignity is not just a personal concern but a societal responsibility. By bridging the gap between savings and expenses, the nation can build a more secure future for its aging population.

Previous Post

How to anticipate and prepare for market fluctuations

Next Post

Role of PPPs in Kenya’s infrastructure investment

Hezron Mwangi

Hezron Mwangi

Related Posts

Investments

Investor shift to long term bonds drives oversubscription in CBK’s reopened auction

June 19, 2025
Analysis

Your First Investment should be an emergency fund with Cytonn Money Market Fund

June 16, 2025
Investments

Contrarian investing in Kenya.

June 13, 2025
Investments

Policies shaping Kenya-Tanzania energy collaboration

June 10, 2025
Investments

Navigating inflation and currency risks in African investments

June 10, 2025
Investments

A guide to investing in Africa

June 10, 2025

LATEST STORIES

How bushy can a bush safari get?

June 20, 2025

Understanding SPVs

June 20, 2025

Why small investments are a power move

June 20, 2025

Social consequences of the tax relief for gamblers

June 20, 2025

How E-Tendering can reshape public procurement in Kenya

June 20, 2025

Unlocking long-term wealth with the power of compounding

June 19, 2025

HealthCare investment trends and insights

June 19, 2025

Saving vs Investing

June 19, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024