Seven in ten Kenyans are not on track to achieve a comfortable retirement, with household expenses, irregular incomes and the withdrawal of retirement savings undermining efforts to secure their financial future, according to a new study released in Nairobi.
The inaugural SanlamAllianz Kenya Retirement Benchmark, themed “Kenya Before It Ages”, reveals that although many Kenyans understand the importance of retirement planning, immediate financial obligations continue to take priority over long-term savings.
The study found that 44 per cent of respondents identified household and family expenses as their biggest obstacle to saving for retirement, followed by low or irregular income at 37 per cent and debt repayments at 24 per cent.
Supporting dependants also emerged as a major challenge, with 62 per cent of respondents saying family responsibilities reduced their ability to save. Additionally, 39 per cent said they could meet basic household expenses for only two months or less if their income stopped.
The findings point to a gap between financial awareness and the ability to build sustainable retirement savings, particularly among households struggling to balance daily needs with future financial security.
Jacqueline Karasha, Chief Executive Officer and Principal Officer, Sanlam Allianz Life Insurance (Kenya) Limited, said Kenya’s next financial inclusion challenge was ensuring that access to financial services translated into long-term security.
“Retirement should be a stage of life that offers dignity, independence and choice, not one where people are forced to scale back their ambitions,” Karasha said.
Financial pressure is also forcing some Kenyans to interrupt their retirement plans. The benchmark found that 23 per cent of respondents had dipped into savings or reduced retirement contributions in the previous year when money became tight. Among earners aged between 20 and 39, the proportion rose to 29 per cent.
The challenge extends beyond the accumulation of savings to the preservation of funds when workers leave employment or businesses.
Among respondents who left a job or business while holding retirement savings, 53 per cent withdrew at least part of their money, while 26 per cent took out the entire amount. Only 32 per cent kept or transferred their full retirement savings.
Although a third of those who withdrew funds used the money to start or support a business or farm, 53 per cent later regretted the decision. Meanwhile, 65 per cent said they understood the implications of withdrawing their savings at the time, while one in five received no assistance when leaving their job or business.
The findings raise concerns about the financial consequences of employment transitions, particularly when workers lack guidance on how to preserve retirement benefits while meeting immediate financial needs.
Retirement planning also remains a challenge because many savers do not have a clear picture of how much money they will need in old age or the income their accumulated savings can provide.
Further findings from the benchmark showed that one in five working-age contributors did not know how much they had saved, while only 29 per cent knew the monthly income they would require during retirement. In addition, 53 per cent had no funded plan for medical expenses after leaving employment.
The study also highlighted emerging risks associated with digital financial services. Forty-five per cent of respondents said they had lost money or personal information through digital financial scams, with the proportion rising to 54 per cent among younger respondents.
These findings add to the challenges facing retirement preparedness in a labour market where many workers have irregular earnings and cannot rely on consistent monthly contributions.
The Kenya National Bureau of Statistics reported that the informal sector accounted for 87.2 per cent of new jobs created in 2025, underscoring the importance of retirement savings arrangements that accommodate workers outside traditional salaried employment.
Jonathan Stichbury, Managing Director and Chief Executive Officer, SanlamAllianz Investments Limited, said retirement planning needed to focus on the income savings could generate throughout a person’s later years, rather than simply the amount accumulated during their working life.
Dr Nyamemba Patrick Tumbo, Group Chief Executive Officer, SanlamAllianz Kenya, said the country had an opportunity to strengthen retirement preparedness while its population remained relatively young.
The company said it would repeat the benchmark annually to monitor progress and inform efforts to improve retirement outcomes.
The findings underscore the need for retirement planning that accounts for the realities of household finances, employment changes, healthcare costs and the challenge of turning savings into a reliable source of income in old age.
