Sharp Daily
No Result
View All Result
Thursday, October 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 Pensions

Unlocking Home Ownership Through Retirement Savings in Kenya

Faith Ndunda by Faith Ndunda
September 12, 2025
in Pensions
Reading Time: 2 mins read

The Retirement Benefits Authority (RBA) allows for individuals to withdraw up to 40.0% of their accumulated pension savings, capped at KES 7.0 mn, to directly finance the purchase of a residential house. Alongside this, existing rules under the Retirement Benefits (Mortgage Loans) Regulations permit members to assign to use up to 60.0% of their retirement savings as collateral for mortgage. This was one of the measures the government enacted to alleviate the housing deficit in the country. According to the 2025 KNBS Housing Survey, only 6.3% of people acquire homes through employer schemes, while 38.7% and 34.1% of owners used commercial banks and SACCOs.

For years, banks have dominated the mortgage market, but their products remain out of reach for many. According to the latest KMRC Research Brief (2024), the total value of outstanding mortgage loans rose by 7.5% to KES 281.5 bn from KES 261.8 bn . Yet, mortgage uptake remains low, with only about 26,000 active accounts nationwide. Interest rates average rose to 14.3% in 2023 from 12.3% in 2023, and non-performing loan ratio stood at 14.4%, signaling affordability challenges and limited access. High rates, coupled with stringent bank requirements, have historically locked out many potential homeowners.

By contrast, the pension-backed mortgage option allows workers to leverage their own savings, up to KES 7.0 mn or 60.0% of their accrued benefits to purchase a home. This approach bypasses the hurdles of bank credit checks, collateral requirements, and high interest rates. It’s especially transformative for informal sector workers, gig economy participants, and SMEs who often lack access to formal credit. Additionally, pension-backed mortgages lower the lender’s risk because the retirement savings guarantee repayment. This, in turn, can make mortgages more accessible to employees with steady contributions but without large amounts of cash at hand.

For individuals, this option is a lifeline in the journey toward home ownership, allowing them to leverage savings that would otherwise remain untouchable until retirement. For the broader economy, it stimulates housing demand, supports the construction sector, and creates jobs in related industries. The pensions sector also benefits, as schemes offering this feature become more relevant to members, though trustees must carefully manage liquidity and educate members on the trade-offs between securing a home today and preserving future retirement income.

RELATEDPOSTS

Coca-Cola HBC to acquire 75.0% of CCBA for USD 3.4bn by 2026

October 23, 2025

BDCs & Private Credit: Income, liquidity and risks (2025)

October 23, 2025

The ability to use up to 60.0% of retirement savings for a mortgage is therefore a game-changer. It bridges the gap between pensions and real estate, two sectors critical to Kenya’s long-term economic growth. Employers now have an opportunity to give their staff access to this benefit. By joining the Cytonn Umbrella Retirement Benefits Scheme, companies can empower employees to secure housing while safeguarding their retirement, a win for workers, employers, and the economy at large.

Previous Post

The role of FDIs in driving sustainable development

Next Post

Mid-September momentum: CMMF posts strong yields and growing trust

Faith Ndunda

Faith Ndunda

Related Posts

Pensions

Understanding Segregated vs Guaranteed Pension Schemes

October 16, 2025
Pensions

StanChart Kenya retirees face fresh legal stalemate over KES 7.0 billion pension payout

October 15, 2025
Pensions

What Happens to Your Funds During Pension Fund Liquidation in Kenya

October 9, 2025
Pensions

The Role of Micro-Pensions Plans in Kenya

October 3, 2025
Pensions

Retirement Benefits Schemes Trustee Governance in Kenya

September 26, 2025
Pensions

Evaluating Defined Benefits and Defined Contributions

September 18, 2025

LATEST STORIES

Coca-Cola HBC to acquire 75.0% of CCBA for USD 3.4bn by 2026

October 23, 2025

BDCs & Private Credit: Income, liquidity and risks (2025)

October 23, 2025

Kenya’s credit rating outlook 2025: Signs of improvement amid Debt challenges

October 23, 2025

Kenya 2025: Diaspora remittances drive growth

October 23, 2025

Compliance training is emerging as the cheapest form of risk control

October 22, 2025

CBK boosts gold reserves by 40.8% to strengthen Kenya’s financial stability

October 22, 2025

Kenya Re to gain bigger market share under new treasury regulations

October 22, 2025

Understanding stablecoins: The backbone of digital finance

October 22, 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