Zamara group Head of Investment Consulting Neha Datta /HANDOUT
Kenya’s retirement
savings industry recorded strong growth in 2025, with more workers and
employers putting money into guaranteed pension funds as confidence in
long-term savings improves.
A new survey by Zamara Group shows
that assets held in Deposit Administration (DA) funds pension savings managed
by insurance companies that guarantee minimum returns rose to Sh475.2 billion
by the end of 2024, up from Sh399.3 billion in 2023.
The report also
showed that average returns paid to savers increased to 12.3 per cent in 2025,
compared to 11.4 per cent in 2024 and 8.9 per cent in 2023.
Deposit
Administration funds are popular with pension schemes because they offer safer
and more predictable returns compared to investments that can fluctuate sharply
with stock market movements.
According to the
survey, annual contributions into the funds jumped by 34 per cent to Sh88.8
billion in 2024, marking the fastest growth seen in the sector over the past 10
years.
Zamara Group Head
of Investment Consulting, Neha Datta, said the growth reflects shows that more Kenyans
are now saving for retirement or other global economic shocks.
“The sustained
growth in DA funds highlights the increasing importance of guaranteed
investment solutions within retirement schemes, particularly during periods of
economic and market volatility,” said Datta.
She noted that
many pension trustees are now prioritising investments that provide stable
returns and protect savers from market losses.
The report linked
the rise in contributions to higher National Social Security Fund (NSSF)
deductions, improved returns offered by insurers, and new pension tax
incentives introduced in late 2024.
The survey covered
17 insurance companies offering Deposit Administration services in Kenya and
found that the industry has remained resilient over the long term.
Over five years,
the average annual return stood at 10.1 per cent, while the 10-year average
return was 9.4 percent.
Group pension
schemes made up the largest share of contributions at 54 per cent, followed by
personal pension plans at 24 percent and umbrella schemes at 22 per cent.
The findings
highlight the growing role of institutional retirement savings in Kenya as more
employers and individuals seek secure ways to build savings for retirement.
Datta noted that pension
trustees to continue comparing providers carefully, looking beyond high returns
to factors such as consistency, governance standards and risk management before
choosing where to invest members’ savings.
