Almost five out of 10 working Namibians cannot afford to save for retirement due to affordability.
According to the Old Mutual Financial Services Monitor, the lack of saving for retirement is most significant among younger and lower income earners.
“It is concerning that even among older consumers and higher income earners, provision for retirement is not optimal,” reads the report.
A third of those that are 50 years old and above have not started saving for their retirement.
“Affordability pressures are the main reason given by those who have not started saving for their retirement,” read the report.
For Namibians who have started saving towards retirement, the top channels used are retirement annuities, a pension fund through their employer, banked savings and a saving or investment policy.
“Among those not using a retirement annuity product, the main reasons were affordability, access to retirement funds at work and perceived relevance of the product,” notes the report.
Being young, poor returns or payouts, using banked savings or retirements are other reasons given by those not saving for retirement.
According to the report, only 22% of those with retirement funds are confident in the adequacy of their retirement savings.
This is mostly seen among those that are 50 years and above and those earning N$30 000 or more monthly.
Namibia’s investment management sector’s total assets under management stood at N$284 billion as of 31 December.
Pension funds accounted for N$119.6 billion of this amount, according to a Namibia Financial Institutions Supervisory Authority quarterly report.
“Pension funds continue to be the dominant source of capital for investment managers, representing a substantial 42.1% of the total assets under management,” reads the report.
One of the largest pension funds in the country is the Government Institutions Pension Fund which currently stands at N$167 billion.
The fund has received a total of N$4.8 billion in contributions, while N$6.3 billion was disbursed in benefits to active annuitants.
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