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Why Should Kenyans Think Hard About Social Security?

BY Soko Directory Team · August 21, 2021 11:08 am

KEY POINTS

Traditionally, Retirement means one is cut off from the normal monthly remunerations together with the packs that come with it. Are you ready?

 

How often do you think about retirement? Do you think planning for your retirement is important? If it “rained” today, will you be ready? How much do you have in the bank? How long can what you have push you if the worst comes to worst?

Did you know that you will need about 70 to 75 percent of your income before retirement to maintain the same standard of living after you retire? This is not easy if you do not have a retirement plan and a social security fund to fall back to.

At one point, each one of us working will retire. Despite the fact that retirement is often something that is imminent, not everyone is prepared to. In fact, nobody looks forward to retirement. Many actually put up a fight to stay on when the time to retire comes.

Traditionally, Retirement means one is cut off from the normal monthly remunerations together with the packs that come with it. Are you ready?

Steve Biko Wafula, the CEO of Hidalgo Group of Companies says that COVID-19 has exposed the ugly truth of how unprepared we are when it comes to the social security of all Kenyans.  He says the pandemic has seen people deplete their savings with nowhere to run.

Read More: Kenya’s Massive Informal Sector And Why Social Security Is Important

“Retirement is certain as death. Old age is certain as taxation. It’s the path we are all going towards. Whether in formal or informal sectors. There is a need for all of us to prepare for it today,” he says.

The most hit sectors by the pandemic in Kenya are the informal sectors. Millions of them have shut down and millions of people have lost their jobs. It is clear that millions of those working in the informal sector have no social security.

The uptake of social security among Kenya’s informal sector is less than 5 percent. This is despite the sector employing more than 86 percent of Kenya’s population and contributing at least 40 percent to Kenya’s GDP.

The lack of Social Security coverage for workers in the Informal Sector has been a challenge in the hopes of obtaining decent work, rights, and dignity for all Kenyans. Efforts are being put in place to cover as many Kenyans as possible through entities such as the National Social Security Fund (NSSF).

“Article 43 (1) (e) of the Constitution of Kenya states that every Kenyan has a right to social security,” says the National Social Security Fund (NSSF).

To help many Kenyans come into the Social Security fold, NSSF has the Haba Haba product. Haba Haba gives members in the informal sector a chance to save a minimum of 25 shillings a day, with the option of withdrawing 50 percent of their contribution after consistently contributing for a minimum of 5 years. This is unlike other benefits NSSF offers in the formal sector where members have to retire or attain the age of 50 to access their savings.”

Read More: Haba Haba na NSSF, the All-Inclusive Social Security Solution for Growth

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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