Want peaceful golden years? Mind your saving culture nowTuesday March 28 2023
For nearly six decades, the National Social Security Fund (NSSF) has been a crucial component of social protection in Kenya as a contributory scheme that offers social security benefits to its members and their dependents once they hit retirement age.
However, a 2021 FinAccess Household Survey Report indicated that only 10.6 percent of households in Kenya have access to pension services, including NSSF.
This means that 89.4 percent of Kenyans lack a financial nest for their retirement, which poses the risk of old-age poverty.
Furthermore, a 2021 study conducted by FG Hermes indicates that Kenya's saving rate at 12 per cent which is way below Africa's average of 17 per cent.
The country is also way behind the 30 percent target as envisaged under the Kenya Vision 2030 blueprint. With the uncertain economic conditions, now more than ever, it is time as Kenyans we start planning for the future.
The devastating impact of Covid-19 on livelihoods brought to the fore the importance of savings and investment. Savings provide a safety net for unexpected expenses.
Whether it’s a medical emergency, car repairs, or an unexpected job loss, having a savings fund gives one peace of mind knowing that there is a cushion to fall back to.
In the latter working, years is when one realises the importance of retirement perks and more so upon retirement, this, therefore, means a savings culture and more so setting up a pension fund is quite useful.
Pension funds are retirement arrangements that are designed to help individuals build a nest egg for their golden years.
While it may be tempting to put off saving for retirement until later years in life, the earlier one starts, the better off one will be in their later life.
Most people will spend at least 20 years in retirement, and with the cost of living on the rise, it is crucial to have adequate savings to rely on.
With the number of retirees growing each year, ensuring that people have sufficient financial resources in their sunset years has become an essential responsibility for individuals, governments, and businesses alike. Cultivating a culture of saving requires a shift in mindset and behaviour.
There is a need to dialogue and educate the public on the benefits of saving through registered pension funds and how these funds benefit Kenyans in both the formal and informal sectors.
By promoting a culture of saving, we can ensure a brighter financial future for ourselves and future generations.
Mr Mainga is the General Manager of the Life & Pensions Division at Minet Kenya.