Only about one in four working Kenyans has any form of pension saving. Yet nearly 84 percent of the workforce earns a living in the informal economy. Together, those two figures reveal a basic challenge; millions of Kenyans may be working today without a clear financial pathway for life after work.

For years, retirement conversations have focused on ageing populations and increasing life expectancy.

While these concerns are valid, they risk distracting us from a more immediate reality closer to home.

Kenya’s greatest retirement risk is not that people are living longer. It is that too few people are preparing financially for those longer lives.

This is not simply a question of personal discipline. It reflects how our labour market has evolved, how people earn and save, and whether retirement systems are keeping pace with those realities. The encouraging news is that Kenya’s retirement benefits industry has made meaningful progress.

Pension funds today play an increasingly important role in capital formation, market development, and long-term economic resilience.

Strong retirement systems do more than protect individuals in old age. They create pools of long-term domestic capital that support investment, strengthen financial markets, and reduce future dependence on family and public support systems.

But growth in assets should not be mistaken for increased preparedness. The more important question is whether retirement security is becoming accessible to many working Kenyans. Today, most workers operate outside traditional payroll systems. The challenge is often not willingness to save, but access to products that match how income is earned.

Recent pension sector assessments show that while overall pension access has improved, informal sector participation remains disproportionately low, increasing only from about 1.3 percent in 2019 to 2.5 percent in 2023. That disconnect should concern all stakeholders.

Historically, retirement systems were designed around predictable salaries, regular deductions, and employer-sponsored contributions. But that model no longer reflects the reality of a growing share of the workforce.

Many workers today earn irregularly as income fluctuates, and financial obligations are immediate. Saving competes with education, healthcare, business reinvestment, and household needs. Viewed from that perspective, low pension participation becomes less a question of behaviour and more a reflection of how retirement systems are structured.

What is needed now is greater intentionality in expanding participation. For industry, that means designing solutions that reflect variable income patterns allowing people to save consistently whether they earn weekly, seasonally, or through multiple income streams.

For employers, it means introducing retirement readiness earlier through financial wellness programmers, onboarding conversations and practical retirement education rather than waiting until employees approach retirement age.

Retirement planning must also evolve beyond replacing income to preserving quality of life. This includes greater attention to healthcare preparedness, emergency planning and building financial resilience for longer and healthier lives, particularly as health continues to emerge as one of retirees’ leading concerns.

For public institutions and financial service providers, it means making retirement literacy more accessible, practical, and continuous.
Retirement planning must also evolve beyond replacing income to preserving quality of life. This includes greater attention to healthcare preparedness, emergency planning and building financial resilience for longer and healthier lives, particularly as health continues to emerge as one of retirees’ leading concerns.

The issue is not that Kenyans do not save. Households already build financial resilience through saccos, chamas, business reinvestment and other informal mechanisms. The gap is that much of this financial behaviour is not yet translating into structured retirement readiness.

This conversation becomes even more urgent when viewed through the lens of Kenya’s youthful population.

Young people are entering the workforce differently than previous generations through entrepreneurship, freelancing, digital work and self-employment, where income patterns are often less predictable and traditional retirement structures less accessible.

Retirement understandably feels distant. Yet retirement preparedness is shaped less by age than by time. The earlier structured saving begins, the greater the opportunity to build long-term financial resilience. This is why retirement planning should become part of financial behaviour from the beginning of working life rather than a decision postponed to later career stages.

That starts with more practical and targeted retirement education from introducing retirement onboarding at entry level to helping people understand how early contributions and long-term investment decisions influence future financial outcomes.

A young graduate entering the workforce requires a different retirement conversation from an informal trader or an established business owner. The objective should not simply be to increase the number of contributors. It should be to help more Kenyans build financial confidence for life after work.

Encouragingly, recent reforms under the National Social Security framework have strengthened long-term savings mobilisation. Flexible retirement products continue to emerge, while mobile financial infrastructure creates opportunities for people to contribute in smaller, more manageable amounts that align with how they earn.

What is needed now is greater intentionality in expanding participation. For industry, that means designing solutions that reflect variable income patterns allowing people to save consistently whether they earn weekly, seasonally, or through multiple income streams.

For employers, it means introducing retirement readiness earlier through financial wellness programmers, onboarding conversations and practical retirement education rather than waiting until employees approach retirement age.

For public institutions and financial service providers, it means making retirement literacy more accessible, practical, and continuous.

Retirement planning must also evolve beyond replacing income to preserving quality of life. This includes greater attention to healthcare preparedness, emergency planning and building financial resilience for longer and healthier lives, particularly as health continues to emerge as one of retirees’ leading concerns.

Dan Ngobiro is the Head of Pension Advisory and Training, Liaison Group