Your Children Are Not A Retirement Option, Plan Early, Experts Urge

Relying on children as a retirement plan is no longer viable, financial experts have warned, as Kenya’s life expectancy rises to 67 years, leaving retirees with an average of seven years to sustain their living expenses without regular employment income.

Despite the growth of pension assets to Ksh2.25 trillion in December 2024, only 19% of the workforce actively contributes to a pension scheme, highlighting the need for more inclusive initiatives to secure financial independence for all Kenyans. Thus, 80% of Kenyans are excluded from pension schemes.

This reality was emphasized at the 3rd East African Pensions Expo and Conference held in Nairobi, which brought together industry leaders, policymakers, and stakeholders to address the challenges of low pension coverage and old-age poverty, under the theme Retirement Planning: Get Started Now.

Speaking at the conference, Director of Pensions at the National Treasury, Michael Kagika, emphasized that a dignified retirement requires deliberate planning. He noted that while pension assets have grown to over Ksh2.5 trillion, representing 15.2% of Kenya’s Gross Domestic Product, inclusion remains low, with Small and Medium-sized Enterprises largely excluded. Many workers, he added, continue to neglect saving for their future.

Calvince Onduru, Deputy Managing Director of Equity Life Assurance Kenya https://equityinsurancegroup.com/ (ELAK), concurred, highlighting the dangers of relying on children to provide financial support in old age and stressing the importance of planning early. He compared retirement savings to the baobab tree, which stores water in the wet season to survive dry periods and continues to provide for the community. “There are people who invest in children as their retirement plan, only to be disappointed in their 20 to 30 years of post-work years,” he said.

Onduru outlined key steps to address the pension gap, emphasizing the importance of financial literacy that empowers people with knowledge, not just products. He also called for leveraging digital access to reach the informal sector and SMEs and for building trust and transparency, so members see real value in every contribution. “Retirement is not an event — it’s a journey. And that journey begins the moment we earn our first shilling,” he added, urging the public to start saving early.

At the conference, Equity Life Assurance showcased its role in transforming the pension landscape by offering tailored solutions for individuals in formal employment, SMEs, and the informal sector, which accounts for 83.7% of total employment yet remains largely excluded from retirement systems. In 2025, Equity Life Assurance achieved 58% growth in Gross Written Premiums to KSh3.8 billion, with total assets rising by 28% to KSh28.6 billion, demonstrating its ability to deliver accessible and affordable retirement planning solutions.

Nation Media Group (NMG) CEO Geoffrey Odundo further emphasized the urgency of retirement planning, pointing out that many Kenyans delay saving for pensions until it is too late. “People don’t take pensions seriously until five years before retirement, which is usually too late to change the course of the future,” he said.

Odundo advised against investing pensions in risky ventures like businesses, instead recommending annuities or pension plans to ensure financial security. “When you retire, your phone goes silent,” he added, offering practical advice for retirees. “Buy an annuity or pension plan where there is a tax-free option; join a social circle like the Pension Club International for interaction with other retirees; do something you like to keep mentally alert, and keep close interaction with your family. Being idle is not useful.”

Lazarus Keizi, Director of Research, Strategy, and Planning at the Retirement Benefits Authority (RBA), also addressed the issue of insufficient savings, emphasizing the importance of pension portability. “Many people lack sufficient pension funds because they access their benefits when changing jobs, using up their savings before retirement. To guarantee comfort and independence during retirement, we need pension portability upon changing jobs. The end game of these transfers is dignity in retirement.”

Policymakers, industry players, and the public were urged to collaborate to close the pension gap. Among the solutions highlighted to expand pension coverage was the National Treasury’s Kenya National Entrepreneurs Saving Trust (KNEST), which enables flexible contributions from as little as KSh50, particularly for informal workers, alongside Equity Life Assurance products.

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