NAIROBI, KENYA: Only one in every seven working Kenyans is fully confident about their financial well-being after retirement. Majority (86 per cent) risk sinking into poverty upon retirement.
This is according to the ‘Retirement Confidence Report’ released by Enwealth Financial Services in partnership with Strathmore University and Institute of Human Resource Management.
According to Enwealth, a pension administrator with over Sh55 billion under administration and consulting, majority of the few workers that save money in pension schemes do not even know how much money they will receive upon retirement.
“Only one in seven respondents are very confident that they will outlive their retirement savings, an important aspect in preventing old age poverty. This points to serious crisis in retirement,” said Simon Wafubwa, Enwealth CEO.
Further the study shows that many Kenyans have never estimated how much money they may need after retirement. A majority have no plan at all about their health needs once they retire but instead, have put their hope in friend’s donations.
This, the report says, has made them more vulnerable to impending poverty upon retirement with their savings not coming any closer to the average monthly expense that they will be facing.
“Our results indicate that at the current savings rate, the average Kenyan man is saving only a third of the money he will need in retirement while the average Kenyan woman is saving half of the anticipated amount,” said Mary Kipkemoi, the study group leader.
A whooping 70 per cent of the workers who took part in the survey and are currently contributing to pension schemes said they do not know their actual pension entitlement or their total accrued pension at retirement.
While majority of respondents estimated Sh50,000 to be the amount of money they will require upon retirement for upkeep expenses, Enwealth projections indicate a huge shortfall in pension savings to meet the desired upkeep amount.
According to the report, employers have not done so much to help workers to prepare for retirement.