Youths aged 18 and above make up the bulk of pensioners' dependents, revealing the extent of the youth unemployment crisis in the country, a new pensioners' survey by the Retirement Benefits Authority (RBA) has revealed.
Eight out of ten pensioners surveyed, or 83.2 percent, said they had dependents who relied on them for support.
"Based on the survey conducted among retirees, a significant majority, 83.2 percent, reported having dependents who rely on them for support in their retirement years," reads part of the RBA Pensioner Survey 2024.
"The survey shows that the highest number of dependants among retirees are aged between 18-24 years and over 25 years ... Demographic distribution suggests a potential reflection of ongoing job scarcity in the country amongst the youths.”
The survey found that with children, and sometimes grandchildren, of retirees increasingly dependent on their parents, there appears to be a complex interplay of economic challenges and family support dynamics, underscoring the need for targeted interventions to strengthen employment opportunities and economic resilience in the future.
The pension watchdog's findings are extrapolated from the Kenya National Bureau of Statistics' (KNBS) quarterly labour force reports.
The statistician has identified a high prevalence of unemployment among youth aged 20-24 and 25-29.
Of the 960,001 unemployed at the end of the quarter to December 2024, some 424,474 were aged 20-24.
A further 186,560 unemployed persons were aged 25-29, with these two age groups contributing largely to the latest reported unemployment rate of 4.9 percent.
The KNBS describes unemployment as a measure of people looking for work in the four weeks prior to the survey.
In addition to supporting unemployed young people, pensioners also have grandchildren as dependents, most of whom were aged between six and 11 years, as well as siblings.
Paying children's school fees tied with building/buying a house as the top use of pension lump sums, highlighting the strain on retirees' finances.
The use of pensioners' funds to pay school fees outstripped other uses, including farming, starting a business, buying land, making bank deposits and buying shares/bonds.
On average, retirees set aside Sh28,494 per month to pay school fees, surpassing funds set aside for medical bills/insurance, rent, household goods and loan payments.
The high dependency of the youth on pensioners could be exacerbated if the gloomy employment outlook materialises.
Employers have projected a tight labour market in 2025 due to increased statutory deductions on pay slips and non-payment of suppliers of goods and services.
The resulting erosion of workers' purchasing power and cash flow crises for companies as a result of rising outstanding bills are seen as a strain on companies' ability to maintain the same number of jobs.
At least 57 large companies have told the Federation of Kenya Employers (FKE) that they have retrenched 5,567 workers over the past three years to 2024.
“This is just a small indication that we get because there are a lot of other companies who do not come to us but go directly to the Ministry of Labour and Social Protection. We suspect that the numbers are higher,” FKE Executive Director Jacqueline Mugo said last month.
The FKE has cited low demand for goods and services, liquidity constraints, rising operating costs, challenging tax regimes, frequent changes in legislation, a shrinking market and loss of competitiveness as factors that are putting pressure on employers and hampering job creation.
