From left: Fanisi Capital Managing Partner Tony Wainaina, Old Mutual Investments Group Executive Director Patricia Kiwanuka and Old Mutual Kenya CEOPeter Mwangi, during the ‘Great Talks’ investment forum at KICC on Saturday. [PHOTO: COURTESY]

Nairobi; Kenya: Over three quarters of Kenya’s working population is not financially ready for retirement, according to a new study.

A Savings and Monitor report (SIM) by Financial Services firm Old Mutual indicates that only 12 per cent of Kenyans are financially ready for retirement while even those who are saving with retirement benefit schemes do not know the value of their savings.

“A whopping 72 per cent are not aware of the value of their savings,” reads the SIM report presented during an investment forum held in Nairobi over the weekend.

Participants at the forum dubbed “Old Mutual Kenya Great Talks” that brought together financial experts and leaders also heard that low incomes and a poor saving culture have left majority of the Kenyans banking on their children and the government for support in old age.

Old Mutual Executive Director Patricia Kiwanuka urged Kenyans to engage financial experts to guide them on other finance options beyond land and property. Ms Kiwanuka said the middle class is overspending, leaving them without any money to save for future needs.

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“There is need for Kenyans to learn how to inculcate a savings culture in their lives,” she added.

She also said most people are not aware of investment opportunities in government and security bonds that have good returns.

Machakos County Governor Alfred Mutua agreed with Kiwanuka’s views, saying investment opportunities in the county governments “is still virgin land”. Speaking at the forum, Keroche Breweries CEO Tabitha Karanja also urged the middle class to seek entrepreneurship options in the devolved economies  while Old mutual Kenya CEO Peter Mwangi said people ought to take ownership of their financial future.

Secure future

“Seize investment opportunities available across the country to secure your future,” he urged. Deputy President William Ruto recently stated that Jubilee Government would ensure the newly introduced National Social Security Fund rates are implemented.

The rates mean all salaried people will have to contribute to the State-controlled NSSF to save more for their retirement. The new NSSF Act requires employers and employees to contribute up to Sh1,080 each (a total of Sh2,160) per month. This amount will rise year on year for five years, peaking at more than Sh8,000 a month for some people.

“Even with the new rates, our savings will only be 12 per cent of total national income, which is the least in East Africa,” Mr Ruto said in Nairobi last month.