Kenya’s retirement savings industry thrived in 2025 as more workers and employers invested in guaranteed pension funds, boosting confidence in long-term savings.
A recent survey by Zamara Group revealed that assets in Deposit Administration (DA) funds managed by insurance companies surged to Sh475.2 billion by the end of 2024, up from Sh399.3 billion in 2023.
The report highlighted that average returns for savers rose to 12.3% in 2025, compared to 11.4% in 2024 and 8.9% in 2023.
Pension schemes favor Deposit Administration funds for their safer, more predictable returns compared to the volatility of stock market investments.
The survey also indicated a remarkable 34% increase in annual contributions to these funds, reaching Sh88.8 billion in 2024, marking the sector’s fastest growth in a decade.
Neha Datta, Head of Investment Consulting at Zamara Group, emphasized that this growth demonstrates a greater commitment among Kenyans to save for retirement and navigate global economic challenges.
“The sustained growth in DA funds underscores the rising significance of guaranteed investment solutions in retirement planning, especially during economic volatility,” Datta stated. She noted that pension trustees are increasingly focused on investments that ensure stable returns and safeguard savers from market fluctuations.
The report attributed the rise in contributions to increased National Social Security Fund (NSSF) deductions, improved returns from insurers, and new pension tax incentives introduced in late 2024.
Covering 17 insurance companies offering Deposit Administration services in Kenya, the survey confirmed the industry’s long-term resilience.
Over five years, the average annual return stood at 10.1%, while the 10-year average was 9.4%.
Group pension schemes accounted for the largest share of contributions at 54%, followed by personal pension plans at 24% and umbrella schemes at 22%.
These findings underscore the growing importance of institutional retirement savings in Kenya as more employers and individuals seek secure ways to build their retirement funds.
Datta advised pension trustees to carefully compare providers, taking into account not just high returns but also consistency, governance standards, and risk management when deciding where to invest members’ savings.
