Nigerian workers and the looming retirement crisis
Retirement, for many Nigerian workers, has become less a season of rest and reward and more a period of uncertainty, neglect, and hardship. Across Nigeria, the story is the same, from civil servants to private employees, from teachers to artisans, and even among retired athletes and politicians. The promise of dignity after decades of labour has become a mirage in a nation where pension payments are erratic, savings are eroded by inflation, and social welfare is almost non-existent.
It is tragic that for many Nigerians, the retirement journey often marks the beginning of financial distress. The average life expectancy in Nigeria now stands at 54.8 years, according to the World Bank’s 2024 Human Development Report, yet many retirees live well beyond 70 years, often in poverty. What should be a reward for years of service becomes a slow slide into deprivation and depression.
“The digitalisation of pension records must be completed to eliminate ‘ghost retirees’ and speed up verification processes. Pension administrators should also be held accountable for delays and opaque investment practices.”
The National Pension Commission (PenCom) reports that as of June 2025, total pension assets stood at N19.7 trillion, up from N17.3 trillion in 2023. Yet, only about 10.2 million Nigerians, barely 8 percent of the working population, are enrolled in the Contributory Pension Scheme (CPS). This means that more than 90 per cent of Nigeria’s labour force, especially those in the informal and self-employed sectors, have no structured pension plan.
For those within the scheme, delays and underpayments remain rampant. The Pension Transitional Arrangement Directorate (PTAD), responsible for pensioners who retired before the 2004 pension reform, still grapples with backlogs. In August 2025, hundreds of elderly pensioners under the Federal Civil Service Pensioners (FCSP) again protested in Lagos and Abuja, demanding payment of arrears dating back to 2017. Some of them, frail and leaning on walking sticks, lamented that colleagues had died waiting for what was rightfully theirs. Their placards told a painful story: “We served Nigeria; don’t abandon us in death.”
According to FCSP chairman, Arashi Lawal, and state secretary, Abiodun Michael, “countless pensioners have not been placed on PTAD’s payroll since the last verification exercise in 2017.” Despite government assurances, progress has been slow, worsened by bureaucratic red tape and alleged data inconsistencies.
The situation is compounded by inflation and currency devaluation. Nigeria’s headline inflation rate stood at 28.9 percent in August 2025, according to the National Bureau of Statistics (NBS), while food inflation climbed above 36 percent, the highest in two decades. For retirees depending on fixed pensions, these figures translate to disaster. What was once a modest but liveable pension is now barely enough for basic food, medicine, and transport.
Unfortunately, the problem extends beyond the public sector. The private sector and the self-employed are equally unprepared for retirement. A 2024 survey by Enhancing Financial Innovation and Access (EFInA) revealed that over 80 percent of small business owners have no formal retirement savings, while 70 percent have no health or life insurance. Many entrepreneurs are so consumed by day-to-day survival that they postpone or ignore planning for the future. As social commentator Godwin Onyema rightly observed, “Entrepreneurs are building businesses, not futures. They are growing their income today at the expense of security tomorrow.”
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A similar study by the Lagos Chamber of Commerce and Industry (LCCI) found that nearly two-thirds of micro and small enterprises in Lagos operate without employee pension schemes, despite statutory requirements. For these business owners, the assumption is simple: their business is their pension. Yet, with Nigeria’s volatile economy, rising cost of living, and uncertain policy climate, such optimism is risky and unsustainable.
The result is a looming social crisis for millions of elderly Nigerians without a steady income or social support. Already, more than 60 percent of retirees rely solely on family assistance, according to PenCom data. But as youth unemployment hovers around 33 percent, and the cost of living worsens, younger family members are less able to shoulder that burden.
This reality underscores the urgent need for structural reforms in Nigeria’s pension and retirement ecosystem. While the CPS introduced in 2004 remains a significant improvement over the old defined benefit system, its reach and efficiency are still limited. Many state governments continue to default on their own pension contributions. As of this year, 15 states were yet to fully implement or domesticate the contributory pension scheme, according to PenCom’s compliance report.
The federal and state governments must therefore treat pension reform and retirement planning as a national emergency. The digitalisation of pension records must be completed to eliminate ‘ghost retirees’ and speed up verification processes. Pension administrators should also be held accountable for delays and opaque investment practices.
Beyond government responsibility, individuals must also cultivate a savings culture. Retirement planning cannot wait until age 60. Financial experts advise that workers should dedicate at least 10-15 percent of their monthly income to long-term savings or investments. Affordable micro-pension plans launched by PenCom in 2019, targeted at informal workers such as artisans, drivers, and traders, should be more aggressively promoted, especially through cooperatives and trade unions.
Corporate Nigeria also has a role to play. Employers must treat pension remittance as an obligation, not a favour. The idea that a company can fail to remit pensions for years without consequence reflects weak enforcement by regulators. The National Assembly should consider stricter penalties for defaulters and create incentives for compliance.
Retirement should not be synonymous with poverty. After decades of public service, no Nigerian should beg or protest to receive their pension. The government’s duty does not end when a worker clocks 60; it continues through how it honours their service.
As Nigeria battles inflation, debt, and economic transition, it must not lose sight of its most vulnerable citizens, the men and women who built the nation’s foundation. Their dignity in old age is the truest measure of national development.
If Nigeria must grow into a fair and functional society, then every worker must be assured that the labour of their youth will not be punished in old age. It is time to make retirement a right and not a regret.
