Retirement in Kenya: Survey shows 7 in 10 workers may not be financially ready

For many workers, retirement savings compete with school fees, rent, food, medical costs and family support.

A retirement study released in Nairobi on October 12 found that these obligations are taking priority over money intended for life after employment.

The inaugural SanlamAllianz Kenya Retirement Benchmark Report 2026, titled Kenya Before It Ages, found that 44 per cent of respondents cited household and family expenses as their biggest obstacle to saving.

Low or irregular income was cited by 37 per cent, while 24 per cent pointed to debt repayments.

About 62 per cent said supporting dependants reduced their ability to put money aside for retirement.

The results describe a familiar financial squeeze: people may understand that they need to save, but their current income often has several competing demands.

A financial buffer that runs out quickly

The report found that 39 per cent of respondents could cover basic household expenses for only two months or less if their income stopped.

That leaves many households vulnerable to even a short interruption in earnings.

A job loss, illness or unexpected family expense can quickly eat into savings that might otherwise be reserved for retirement.

The survey also found that 23 per cent had dipped into savings or reduced their retirement contributions during the previous year.

Among respondents aged 20 to 39, the proportion rose to 29 per cent.

These withdrawals and reductions can have a cumulative effect.

Money removed from a retirement account stops earning future returns within that account, while missed contributions reduce the amount available to generate income after work.

The pension money people withdraw

One of the report’s most striking findings concerns workers leaving employment.

Among respondents who had left a job or business while holding retirement savings, 53 per cent said they withdrew at least part of the money.

Twenty-six per cent took the entire amount, while 32 per cent said they kept or transferred all their savings to another retirement arrangement.

Of those who withdrew money, 53 per cent later regretted the decision.

One in five said they received no guidance when leaving employment.

The reasons for accessing the money included starting or supporting a business, paying everyday expenses and investing in property or other assets.

These may be pressing needs, but using retirement savings to meet them can leave a person with less money to rely on later.

Workers leaving a job should therefore find out what preservation or transfer options their pension scheme allows before making a final decision about their benefits.

Saving is not the same as planning income

The report also found that only 29 per cent of respondents knew approximately how much monthly income they would need in retirement.

Forty-five per cent had never heard of income drawdown, while 53 per cent said they had no funded plan for medical costs after retirement.

Income drawdown is an arrangement under which pension savings are used to provide retirement income over time.

A person’s retirement balance is only one part of the calculation; they also need to consider how long it may have to last, their expected expenses and the form in which benefits can be received.

Medical costs are another consideration, since healthcare needs may change as people grow older.

The limits of the survey

The report’s findings need to be read in context. It was based on an online survey of 300 Kenyans, including earners aged 20 to 64 and retirees.

SanlamAllianz describes the results as indicative rather than nationally representative.

The seven-in-ten figure should therefore not be treated as a precise estimate for every Kenyan worker.

It captures the financial concerns and experiences of the surveyed group.

The findings also arrive in a labour market where informal work accounts for a large share of new jobs.

Workers with irregular earnings may not have the predictable monthly contributions available to many formal employees.

What workers can take from the findings

Kenya has several retirement-saving routes, including NSSF, employer-sponsored pension schemes and registered individual pension plans.

The appropriate combination depends on a person’s employment situation, income and scheme rules.

The report points to three practical areas that often need attention:

Knowing how much is already saved, avoiding unnecessary depletion when changing jobs and estimating the income needed after retirement.

For people who are self-employed or earn irregularly, flexibility in the timing of contributions can be important, but so is preserving savings when income fluctuates.

Retirement preparedness cannot be measured by whether someone has heard of a pension.

It depends on whether their savings and other resources can support them once employment income stops.

For a country with a young population, that is a problem worth addressing before millions more workers approach retirement age.