Editorials

Embrace savings culture

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Summary

  • The devastating Covid-19 shocks on livelihoods and health have brought to the fore the importance of savings and investment.
  • Statistics have shown Kenya's savings rate is low, remaining below 15 percent of gross domestic product (GDP) against a target of 30 percent under the country’s long-term development blueprint, the Vision 2030.

The devastating Covid-19 shocks on livelihoods and health have brought to the fore the importance of savings and investment.

Statistics have shown Kenya's savings rate is low, remaining below 15 percent of gross domestic product (GDP) against a target of 30 percent under the country’s long-term development blueprint, the Vision 2030.

The findings of Standard Chartered Wealth Expectancy Report that 17 percent of Kenyans do not save or invest for retirement stresses the need to create more awareness on how to manage money.

Kenyans should find a way to start saving — however little — and stop giving excuses such as low disposable incomes, high inflationary pressures and taxation for not setting aside money for the future.

This is because unforeseen shocks such as Covid-19 on sources of livelihood spare no one. Even the countty's wealthiest were hit by the pandemic shocks.

The report suggests that a late start to retirement planning, combined with the pandemic-induced confidence gap, has left a significant proportion of affluent consumers at risk of a shortfall for their retirement.