78 per cent of Kenyans experienced income declines in 2024, according to the 2024 Financial Services Monitor by Old Mutual.
The report surveyed employed Kenyans aged 20 to 59, earning KSh12,000 or more, representing about 63 per cent of the country’s working population.
The findings paint a picture of a population grappling with financial hardship. 40 per cent of respondents reported significant stress, with 15 per cent feeling overwhelmed by their financial responsibilities.
This anxiety is further exacerbated by high living costs, a challenging business environment, unpredictable financial situations, and inadequate income, leading to widespread concerns about job security.
Financial Strain and Adaptation
The report highlights a significant decline in financial security. Only 30 per cent of respondents reported that their household incomes are sufficient to cover expenses with a surplus at the end of the month. To cope with these challenges, many Kenyans have adopted cost-cutting measures.
These include downsizing their living arrangements, opting for cheaper products and services, moving children to more affordable schools, and cutting back on discretionary expenses such as dining out, entertainment, and travel.
Rise of Entrepreneurship
To supplement their incomes, 50 per cent of Kenyans now own a business, with 30 per cent of these ventures formally registered.
However, 84 per cent of these businesses lack insurance, leaving them vulnerable to financial risks.
“The traditional ways of earning a living or managing household expenses are no longer sufficient,” said Old Mutual CEO Arthur Oginga. “Small businesses, such as tutoring, food delivery, or selling second-hand goods, are becoming increasingly common as many opt to bypass formal employment.”
Retirement Concerns
Despite the ongoing financial difficulties, Kenyans remain focused on their long-term financial security. While 85 per cent acknowledge the importance of saving for retirement.
Only 7 per cent of those surveyed are confident about their retirement savings, a steep decline from 12 per cent in 2023.
Nevertheless, the number of consumers saving for retirement has increased, rising from 26 percent in 2023 to 36 percent in 2024. The primary saving methods include employer pension schemes, savings groups, and personal investments, highlighting the resilience of Kenyans.
