Over 70 per cent of Kenyans are unprepared for retirement, according to a new survey by the Association of Kenya Insurers.
The low preparedness for retirement is blamed on among others high cost of living, meagre income, low level of saving discipline, financial illiteracy and lack of investment ideas.
Experts believe lack of information on pension products and messages on the subject are some of the factors fueling low levels of retirement preparedness in Kenya.
“Majority is not ready for retirement despite the mention of them hoping to have saved enough for when they retire. Only 29% felt that they are well prepared for retirement” reads the report released Tuesday.
The survey shows that only 2 per cent of Kenyans are seeking information on saving for retirement from professional services with a majority either accessing the information through the media and the internet.
The research covered 10 counties and shows that those in the rural areas believe they are better prepared for retirement compared to those in the urban areas, with experts estimating that a retired person needs up to 60 per cent of their last salary to maintain their existing standard of living through retirement.
While there is a tendency of retirees venturing into business funded by the retirement savings, the study shows that most of such ventures usually fail due to lack of management expertise and knowledge of the business.
The report is recommending a targeted approach to educate the young population of importance of starting early to prepare for retirement.