ICEA LION Life Assurance has released the Retirement Preparedness Index (IRPI), offering a timely and data-driven assessment of how Kenyans are planning for life after active employment. Based on a comprehensive survey of 1,300 respondents across major urban and semi-urban centres, the IRPI paints a picture of growing awareness but persistent gaps in how households save, invest, and plan for the future.
The study covered both formal and informal sector workers, as well as 300 retirees. It assessed national and individual preparedness using a four-pillar model: savings behaviour, replacement income, financial sufficiency, and asset holdings. The result: an overall IRPI score of 0.5418, signalling moderate preparedness and highlighting the urgent need for stronger pension participation and long-term financial planning.
Formal sector leads in pension readiness
One of the clearest insights from the study is the glaring gap between formal and informal sector workers. Formal employees show higher participation in pension plans, save more consistently, and accumulate more over time. The National Social Security Fund (NSSF) remains the most widely used pension vehicle for both workers and retirees.
However, savings culture remains a national concern. A majority of working Kenyans save less than 10% of their income, with many only setting aside whatever remains after meeting monthly expenses. This habit leaves a large proportion of households vulnerable — most respondents estimated that their current savings would last between one and six months if they stopped earning today.
Retirement confidence remains low
The IRPI reveals a troubling confidence deficit. Most working Kenyans do not believe their current savings and investments will support them in retirement. On the other hand, retirees offer a mixed picture: while about half feel sufficiently supported, 12% struggle to meet even basic expenses such as food, healthcare, and family support.
ICEA LION rolls out retirement planning index for Kenya
Interestingly, a majority of today’s workforce now anticipates retiring after age 60, reflecting shifting economic pressures and the rising cost of living.
Asset ownership is still skewed to rural holdings
Another key finding is that Kenyans continue to rely heavily on rural homes and land as primary assets. While culturally valued, these assets often do not provide the liquidity or cash flow needed to sustain day-to-day living in retirement. Additionally, such assets are difficult to convert to cash in case of emergencies, compounding the owner’s vulnerability. This makes income-generating investments and pension products more critical.
Financial literacy remains a key barrier
The study highlights a persistent challenge: limited understanding of the time value of money. Nearly a quarter of respondents do not consider how inflation erodes purchasing power, and 41% acknowledge it but feel unable to plan around it. This gap directly affects long-term savings behaviour and the ability to make strategic retirement decisions.
A call to action
ICEA LION’s IRPI provides a clear message: while Kenyans value financial security in old age, many are still under-prepared, under-funded, and under-planned. Strengthening national savings culture, expanding pension coverage, especially in the informal sector, and enhancing financial literacy will be essential to improving future outcomes.
The insurer has also launched an easy-to-use Personal Retirement Preparedness Calculator to help individuals evaluate their readiness and take actionable steps toward a more secure retirement.
As the cost of living continues to evolve, the IRPI offers a timely reminder: the best time to plan for tomorrow is today.
