Seven in 10 Kenyans say they are not on track for a comfortable retirement, despite widespread awareness of the importance of saving for later life, according to a new study by SanlamAllianz Kenya.
The inaugural SanlamAllianz Kenya Retirement Benchmark, released in Nairobi on Monday under the theme “Kenya Before It Ages”, identifies household financial pressures, job-related savings withdrawals and limited retirement planning as major obstacles to financial security in old age.
The study found that the challenge is not a lack of awareness but the difficulty of balancing everyday expenses with long-term savings, alongside limited knowledge of how much income accumulated savings will provide during retirement.
“Kenya has made remarkable progress in expanding financial access and inclusion. The next challenge is ensuring that financial participation translates into long-term financial security,” said Jacqueline Karasha, chief executive officer and principal officer of Sanlam Allianz Life Insurance (Kenya) Limited.
“Retirement should be a stage of life that offers dignity, independence and choice, not one where people are forced to scale back their ambitions.”
Family expenses take priority
Household and family expenses were identified as the biggest barrier to retirement savings, cited by 44 per cent of respondents. Low or irregular income followed at 37 per cent, while 24 per cent pointed to debt repayments.
Only four per cent cited a lack of understanding or trust in retirement products as a barrier.
The study found that 62 per cent of respondents said supporting dependants reduced the amount they could save, while 39 per cent could meet basic household expenses for only two months or less if their income stopped.
In the past year, 23 per cent had withdrawn savings or reduced retirement contributions to cope with financial difficulties. The proportion rose to 29 per cent among earners aged 20 to 39.
Many withdraw retirement savings when leaving jobs
The report also highlights the risk of workers cashing out their retirement savings when leaving employment or a business.
Among respondents who left a job or business with retirement savings, 53 per cent withdrew at least part of their funds, while 26 per cent withdrew the entire amount. Only 32 per cent preserved or transferred their full savings.
About a third used the money to start or support a business or farm.
Despite 65 per cent saying they understood the implications of their decisions at the time, 53 per cent later regretted withdrawing the money. One in five respondents said they received no assistance when leaving their jobs or businesses.
Karasha said awareness alone was insufficient to protect retirement savings from competing financial demands.
“As an industry, we have 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 said.
Limited knowledge of retirement income
The study found that one in five working-age contributors did not know how much they had saved for retirement, while only 29 per cent knew how much monthly income they would need after leaving employment.
About 45 per cent had never heard of income drawdown, a retirement arrangement that allows people to access their savings through regular withdrawals. However, 51 per cent said they wanted a guaranteed monthly income for life.
The findings also showed that 53 per cent had no funded plan to meet medical expenses after retirement.
Despite these concerns, 88 per cent of respondents said they would continue working or running a business even if their retirement income was sufficient to meet their needs.
“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,” said Jonathan Stichbury, managing director and chief executive officer of SanlamAllianz Investments Limited.
Informal workers seek flexible savings options
The findings come against a backdrop of changing employment patterns, with the Kenya National Bureau of Statistics reporting that the informal sector accounted for 87.2 per cent of new jobs in 2025, when the economy grew by 4.6 per cent.
Among working respondents, 39 per cent said their earnings fluctuated from month to month, while 51 per cent of informal workers preferred making retirement contributions through mobile money.
However, the growing use of digital financial services presents security concerns. The study found that 45 per cent of respondents had lost money or personal information through digital financial scams, rising to 54 per cent among younger respondents.
Trust in a provider or regulator was identified as the leading factor that would encourage respondents to take up a retirement product.
SanlamAllianz Kenya Group Chief Executive Officer Dr Nyamemba Patrick Tumbo said the country had an opportunity to strengthen retirement preparedness while its population remained relatively young.
“Through the SanlamAllianz Kenya Retirement Benchmark, we aim to measure progress, stimulate dialogue and support the decisions needed to improve retirement outcomes for future generations,” he said.
SanlamAllianz said it would conduct the benchmark annually to track changes in retirement preparedness and identify areas requiring further action.
