Only 7.2 million out of a total 106.2 million Nigerian adults aged 18 years and above, operate a formal pension accounts, findings by EFInA reveals.
This figure which translates to a paltry sum of about 7% of Nigeria’s total adult population falls short of the National Financial Inclusion Strategy (NFIS) targets of 40%. Recall that one of NFIS targets was to increase the Nigerian adult population covered by a regulated pension scheme to about 40% by 2020.
This finding was disclosed by the MD/CEO of Enhancing Financial Innovation & Access (EFInA) Nigeria, Ashley Immanuel, during a virtual stakeholders meeting held today. The virtual meeting which was graced by naijabusiness.com.ng had the theme: ‘’Pension and Financial Inclusion: EFInA Access to Financial Services in Nigeria (A2F) 2020 Survey.’’
Of the over seven (7) million Nigerian adults that operate pension accounts, only 1.8 million operate a micro-pension scheme. Further breakdown revealed that only 72% of the pensionable adults are male, implying that just 28% are females.
In addition, of the 7.2 million Nigerian adults covered by a regulated pension scheme, 72% work in the formal sector, 6% in the informal sector, 5% are farmers, 6% are dependents and 12% are business owners.
On the other hand, the report which is for the year ended 2020, revealed that 98% of individuals working in the informal sector in Nigeria, translating to about 48.7 million are without a pension account. The report revealed that most informal sector workers plan to rely on their savings, children or businesses in retirement.
On why the apathy or lack of participation exists, the report opined that irregular income and not having enough money ranked top of the reasons given by the respondents. On the other hand, low understanding of available services as well as lack of confidence in eventual disbursement at retirement also contributed to the poor performance during the period under review.
In addition, the report also revealed that 94% of adults without pensions are unaware of the services. Infact 62% of individuals with pension have not heard of Micro-Pensions, while One-third of adults who have heard of it have a pensions account.
Are there alternative plans by those financially excluded?
Naijabusiness.com.ng gathered that 21 million adults who do not currently have pension are making regular contributions for old age. Of this figure, 11.5 million adults are making daily and weekly savings suitable for micropensions.
Additionally, the report revealed that majority of non-pension holders (34 million, translating to about 70%) working in the informal sector have saved money in the last 12 months. Two thirds save weekly or monthly.
It is worthy to note that EFInA is a financial sector development organisation that promotes financial inclusion in Nigeria.