Kenyans are living longer after their retirement age of 60 years than was the case a decade back.
This implies that in a decade or two, hundreds of thousands of retirees, who are currently in their 40s will be wallowing in old-age poverty and sickness unless they saved enough to keep themselves afloat.
Today, unlike in the past when parents used to rely on their children to provide support in old age, most of the children have bought houses in urban centres – which the majority of them consider home – contrary to the old concept of the term.
Demographers argue that longevity of life in Kenya has been on the rise since 2004, when the number jumped from 48.9 years to 55.3 years in 2006 and thereafter rising steadily until 2011 when it jumped again to 63 years.
The steady rise in elderly population is attributed to the improvements in healthcare system, better housing and level of education, all which have resulted in the overall decline in early and mid-life mortality.
But beneath these figures, lie a looming crisis linked to low pension coverage and the fact that 80 per cent of workers who save make bad choices.
Retirement Benefits Authority (RBA) says that barely 20 per cent of Kenyans save for pension which means that as life expectancy continues to increase, 80 per cent of Kenyans will be unable access better treatments or escape old age poverty.
Beverlyn Atieno, 24, who still regards herself as youth, says she has not started saving for her old age despite being employed because she does not believe by the time she is out of active employment she will still be alive.
She says there are many things parents expects her to do. “Being the first born in our family I am expected to at least help educate my brothers and sisters so that they also get education to help them in future,” Atieno says.
However, Caroline Munyaka, 30, counts herself lucky. She has a job and does not have anyone who depends on her limited income. Her main trouble is the small income that cannot be divided to do anything meaningful in life. “Yes, I do not have anybody who depends on my money, but it is small that I cannot afford to split it,” she says. She is waiting to get a well-paying job to start saving for retirement.
These are just but a few cases of youths who do not save money for old age. Additionally, the majority of youths do not have jobs and cannot save for their pension.
Experts say unless something is done now, long life expectancy witnessed in Kenya may spell doom in future. This is because meagre salaries paid to employees and attempts by government to shift employees from defined benefit to defined contribution schemes are expected to change the local pension landscape.
RBA Chief executive officer, Nzomo Mutuku said it is high time Kenyan youths changed their old-age narratives and started financial savings to cushion them in old age. He said even though life expectancy has increased, the danger is that these people would outlive their retirement savings, including funds for healthcare and are likely to wallow in poverty.
“Stop thinking that your children will take care of you in old age. By the time, you have attained retirement age, your children will also be having other burdens to deal with,” he said.