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misconceptions about pension

Debunking 5 Common Misconceptions About Pension in Kenya

misconceptions about pension

Debunking 5 Common Misconceptions About Pension in Kenya

Due to the COVID-19 pandemic, thousands of people lost their jobs or had their businesses collapse. Those who had been saving religiously, were fortunate enough to have their savings cushion them through the uncertainty.

Kenya has previously been named as one of the countries with the lowest saving rate across Africa. The ongoing pandemic is a wake up call to the economic uncertainty that accompanies such occurrences and should be the trigger that encourages smart financial decisions.

In this article, we debunk some of the common misconceptions preventing Kenyans from saving up for retirement.

5 Common Misconceptions About Pension in Kenya

Below are a few of the misbeliefs about saving for retirement in Kenya.

1) Retirement or Pension Savings is for the Elderly to Think About

There are studies estimating that the average person will require about 70% of their income just to maintain their current standard of living post retirement. This implies that pension is something one should think about when they are young, full of energy and can more easily bounce back from financial setbacks.

The best time to begin planning for your retirement is as soon as you begin working. In order to enjoy the golden years, one needs to delay gratification, carefully plan their steps, and make use of smart investment strategies that will increase their savings.

2) Family will Take Care of You When You Retire.

In Kenya, society is experiencing a shift from a community-based way of life towards a more capitalistic culture due to increased modernization. On top of this, economic uncertainties place heavy burdens on individuals making it hard for them to provide for their own families, let alone support elderly members.

Planning for your retirement eases the burden of your young relatives, and saves you from dependency, which is a leading cause of poverty among the elderly in Kenya.

3) Pension is Only for Those Who are Employed.

In Kenya, anyone above the age of 18, who is employed, self-employed, works in the informal sector or has some disposable income, can begin saving towards their retirement.

With the existence of individual pension plans, employment is not a condition that needs to be met to begin saving up for retirement.

4) Saving Towards Pension is Complex

The Retirement Benefit’s Authority, has a number of registered pension schemes designed to help you save up for retirement. With a rise in technology, the process has been simplified further as contributors can be made through digital devices.

The only condition in saving towards pension is that you adhere to your scheme’s terms.

5. Pension Can Only be Accessed After Retirement.

Pension savings can be accessed before retirement in the event that you: resign, get terminated, are declared redundant, permanently migrate to another country or are rendered unable to work due to a medical condition.

Although there are tax implications of withdrawing pension savings before retirement, your ability to access your pension ultimately depends on the conditions of the scheme to which you are part of.


You should not wait for retirement age to begin thinking about pension. Saving up for post-retirement should be a disciplined act that begins as soon as you start working. Do not let any misconceptions about pension derail you.

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