Pension firms eye informal sector workers
Guests in attendance during the Pensions Conference and Expo at KICC in Nairobi on October 29, 2026.
What you need to know:
- The push comes as pension coverage among informal-sector workers remains below two percent.
- Unlike salaried workers, informal workers must set aside money themselves while meeting other bills.
Pension firms and their regulator are shifting focus to workers in the informal sector in the fight against old-age poverty.
The firms are seeking to step up the rollout of micro pension plans, which allow workers with small and irregular incomes to save for retirement.
The Retirement Benefits Authority (RBA), the industry watchdog, has backed the effort with enhanced financial education to make informal-sector workers aware of the benefits of saving for retirement and of how to access schemes.
The push comes as pension coverage among informal-sector workers remains below two percent, according to the RBA, leaving the majority of workers outside the formal sector without retirement savings.
From right: Caroline Lukano, Stella Nafula and ken Muhiu from Kenbright at their stand during the Pensions Conference and Expo at KICC, Nairobi on October 29, 2026.
This has left millions of informal workers vulnerable to old-age poverty, as Kenyans on average live longer and the ranks of the elderly poor swell while the traditional social fabric yields to rapid urbanisation and changing social and family trends.
"We still have Kenyans out there who really don't save towards any retirement and we are really engaging to make sure that those in the informal sector join because they will at one time retire," said Tom Kiptanui, the RBA's director of market conduct, at a pensions conference and expo hosted by the Nation Media Group.
"We are supporting the retirement benefits industry to develop unique pension products for the informally employed, such as looking at flexible contributions because of the informal sector's irregular incomes."
Kenya's informal economy remains the main source of new employment. The Kenya National Bureau of Statistics (KNBS) estimates that the sector created 716,800 jobs in 2025, accounting for 87.2 per cent of new jobs.
Unlike salaried workers, whose pension contributions can be deducted automatically, informal workers must set aside money themselves while meeting daily costs, including rent, food, school fees and medical bills.
The 2024 FinAccess Household Survey found that access to pension products rose from 15.2 per cent in 2021 to 20.4 per cent in 2024, but the gains have not removed deep disparities linked to employment and income.
It found that 72.8 per cent of respondents cited the lack of a regular job or the ability to afford pension contributions as a barrier to pension access, while 31.2 per cent pointed to inadequate information.
The industry is also seeking to raise awareness of the importance of protecting savings from risky investments.
Nation Media Group chief executive officer Geoffrey Odundo warned conference participants against unregulated financial advisers promoting investments through social media.
"Professionals popping up from everywhere. Do not listen to investors or advisors who are not regulated," Mr Odundo said.
Nation Media Group Managing Director and CEO Geoffrey Odundo makes his remarks during the Pensions Conference and Expo at KICC, Nairobi on October 29, 2026.
"People are telling me there are all sorts of advisors on Facebook, Instagram, etc., telling you about money markets, about investments in shares, and you don't even know whether they're regulated or not."
In the past, social security was not a worry for many Kenyans because there was a large extended family to fall back on in the rural areas. But as the social fabric changes and more people opt to retire in urban centres, the trend is increasingly becoming a headache for policymakers.
The State has started a monthly stipend of Sh2,000 for Kenyans above 70 years to cushion them from old-age poverty.
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