Kenyans are saving significantly more for their retirement, with pension contributions nearly doubling since 2022, according to data from the Retirement Benefits Authority (RBA).
In the six months ending June 2022, pension contributions stood at Ksh.62.73 billion. By December 2024, this figure had surged to Ksh.118.80 billion an 89% increase over the two-and-a-half-year period. The rise in savings has been steady: Ksh.70.26 billion was contributed in the second half of 2022, followed by Ksh.83.14 billion in the first half of 2023 and Ksh.105.65 billion in the second half. In 2024, Kenyans contributed Ksh.116.10 billion in the first half, then slightly more Ksh.118.80 billion in the second half.
This growth comes amid key regulatory changes and broader government reforms aimed at deepening pension coverage, especially among informal sector workers.
Notably, the implementation of amendments to the National Social Security Fund (NSSF) Act, 2013, has played a central role. In 2024, the NSSF introduced a tiered contribution structure: Tier I covers pensionable earnings up to Ksh.7,000 monthly, while Tier II applies to earnings above that threshold. Employees now contribute 6% of their gross monthly pay, which is matched by their employers.
In 2024, the maximum monthly deduction stood at Ksh.2,160 per contributor, matched by the employer to total Ksh.4,320. However, from February 2025, the contribution cap was doubled, bringing the employee’s maximum deduction to Ksh.4,320 and the combined contribution to Ksh.8,640.
In parallel, contributions to Post-Retirement Medical Funds (PRMFs) have soared. From Ksh.51.51 million in the second half of 2023, PRMF contributions rose to Ksh.76.02 million in the first half of 2024, and then jumped over threefold to Ksh.268.36 million in the latter half. This sharp rise followed a Treasury directive that allowed pension schemes and employers to establish medical funds for retirees under newly enforced PRMF rules.
These trends underscore a growing awareness among Kenyans of the importance of retirement planning and healthcare security, driven by both policy shifts and increased financial literacy.
