Home GENERAL NEWS Covid-19 pandemic sets stage for retirement crisis

Covid-19 pandemic sets stage for retirement crisis

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The coronavirus pandemic portends bad times for the retirement sector in the next 30 years as most Kenyans are now hard-pressed to meet daily upkeep expenses.

Retirement funds administrator Zamara Group said the number of retirees relying on their children or handouts as well as being forced to seek work was expected to rise from 12 per cent to 30 per cent by 2050.

Head of Umbrella Solutions Angela Okinda said the current scenario, where businesses closed down and sent workers home while others scaled down operations, meant employees would spend their savings on food, rent and other daily needs.

“The longer the coronavirus social-economic impact continues, the higher the financial risk in retirement,” she said in a webinar.

“While disposable incomes are under severe pressure from rising costs of living, one must try to manage the expenses and keep saving for their retirement.”

Ms Okinda said pension schemes must sensitise members on the need to balance immediate and long-term needs with an emphasis on maintaining a disciplined practice of saving for retirement.


The webinar heard Kenyans must take advantage of low-priced equities and buy for the long-term as markets will recover, creating a new pool of easy cash for old age spending.

An impromptu poll during the webinar organised by Zamara, which attracted 350 participants, showed 70 per cent were eyeing the bourse, 21 per cent vowed to hold on their current stocks portfolio, seven per cent appeared oblivious of the current situation while a paltry three per cent believed one should sell to avoid further losses.

Co-op Trust Investment Services chief executive Nicholas Ithondeka vouched for better times ahead for the equity markets.

He said poor returns reported in the first quarter should not deter pension schemes from increasing their stakes in various listed entities.

As of December 31, pension schemes had invested 24 per cent of their Sh1.3 trillion funds in equities and less than one per cent in offshore investments.

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