A new report by SanlamAllianz has found that despite widespread awareness of the importance of saving for retirement, 7 in 10 Kenyans say they are not on track for a comfortable retirement. The inaugural SanlamAllianz Kenya Retirement Benchmark Report, released in Nairobi, highlights that Kenyans prioritize household expenses, debt repayments, and immediate financial needs over long-term financial security. The report, themed "Kenya Before It Ages," emphasizes the need for Kenyans to prioritize retirement savings.
According to the report, family costs are the biggest barrier to saving, at 44%, followed by low or irregular income at 37%, and debt repayments at 24%. Only 4% of respondents blame a lack of understanding or trust in retirement products. The report also found that 62% of respondents say supporting dependants reduces their ability to save, and 39% could cover basic household costs for two months or less if their income stopped today.
The report revealed that in the past year, 23% of respondents dipped into savings or cut retirement contributions when money was tight, rising to 29% among earners aged 20 to 39. Among respondents who left a job or business holding retirement savings, 53% withdrew at least part of the money, and 26% took everything. Only 32% kept or transferred the full amount. A third used the cash to start or support a business or farm.
The report also found that 65% of respondents said they understood the impact of cashing out their retirement savings at the time, and 53% later regretted the decision. One in five received no help at all when they left. Jacqueline Karasha, Chief Executive Officer and Principal Officer, Sanlam Allianz Life Insurance (Kenya) Limited, noted that the findings show that most Kenyans understand the importance of saving for retirement, yet everyday financial pressures often compete with long-term goals.
Karasha emphasized that preservation cannot rely on awareness alone, and the industry has a responsibility to make it easier for people to stay invested, provide relevant guidance when key decisions arise, and design solutions that reflect the realities of people's lives. She also noted that Kenya has made remarkable progress in expanding financial access and inclusion, but the next challenge is ensuring that financial participation translates into long-term financial security.
Jonathan Stichbury, Managing Director and Chief Executive Officer, SanlamAllianz Investments Limited, noted that one in five working-age contributors do not know how much they have saved, and only 29% know the monthly income they will need in retirement. He also found that 45% had never heard of income drawdown, yet 51% want a guaranteed monthly income for life. Stichbury emphasized that retirement security is ultimately not about the balance someone accumulates during their working years, but whether those savings can provide a reliable income throughout retirement.
Dr. Nyamemba Patrick Tumbo, Group Chief Executive Officer, SanlamAllianz Kenya, noted that Kenya has a rare advantage: time. As a relatively young country, Kenya has an opportunity to strengthen retirement preparedness before demographic pressures become more pronounced. SanlamAllianz is committed to repeating the Benchmark every year to track progress and support decisions needed to improve retirement outcomes for future generations.
Key points
- Family costs, low income, and debt repayments are major barriers to retirement savings for Kenyans.
- Most Kenyans understand the importance of saving for retirement but prioritize short-term financial needs over long-term security.
- The industry must make it easier for people to stay invested and provide relevant guidance to improve retirement outcomes.
