Pains of low-income retirees reveal underbelly of pensions
For many retired Nigerians, old age is no longer a season of rest but of reckoning. After decades of work, countless pensioners now live with the quiet fear of running out of money before the month ends. Their pensions meant to guarantee dignity barely stretch to cover the cost of food, healthcare, and rent in an economy where inflation erodes savings faster than they can grow.
A recent BusinessDay survey of pensioners across the country reveals the starkness of this reality. The questionnaire divided respondents into income bands and asked how they were coping with life after retirement. Fewer than one in ten described themselves as’ ‘comfortable.’ Most said they were merely ‘managing,’ while nearly half admitted they were ‘struggling’ or ‘unable to meet basic needs.’
Counting every naira
When asked about their monthly pension income, most respondents reported amounts between N50,000 and N100,000, once meaningful sums that now barely cover groceries. Several retirees in Lagos and Ogun said they would need at least N200,000 a month to live comfortably, and N300,000 if they were still paying rent or supporting dependents.
“Every month I buy less rice and more garri,” said a 72-year-old former civil servant from Abeokuta. “Sometimes, my children send money, but they also have their own families to feed.”
Many pensioners continue to shoulder family responsibilities long after they have stopped earning. Some support unemployed children, while others care for grandchildren whose parents have migrated for work. What was once a two-person income has become a single, strained pension stretched across generations.
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Delayed payments, rising anxiety
Regular pension payments remain a source of frustration. Only a few respondents said they receive their pensions ‘always on time.’ Most reported delays lasting weeks or months. For those depending solely on that income, such gaps can mean unpaid medical bills or skipped meals.
“I worked for 35 years,” said a retired teacher in Kaduna. “I never missed a day at school, but now my pay comes late and nobody explains why.”
These payment disruptions mirror deeper weaknesses in Nigeria’s pension administration. Despite reforms under the 2004 Pension Reform Act and the later transition to a contributory scheme, many state and local government retirees are still tied to the old, non-funded system. The result is uneven access: federal retirees receive more predictable payments than their counterparts in most states.
Where the money goes
According to the BusinessDay survey, most pensioners spend the largest share of their income on food, healthcare, and rent. Medical expenses have become particularly heavy. Rising drug prices and limited health insurance options leave many retirees vulnerable. Some skip medication to save money, while others rely on herbal alternatives.
Utility bills, transportation, and debt repayment follow closely. Some retirees sell personal assets such as land, livestock, or household electronics to cover basic expenses. Others supplement their income through small trades, farming, or consultancy work. Nearly two-thirds of those surveyed said they had to seek additional income sources after retirement, with petty trade and family support the most common lifelines.
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Coping with inflation
Nigeria’s inflation has eased to 18.02 percent, but the base effect has eroded the real value of fixed pensions. Prices of basic staples such as rice, beans, and bread have more than doubled in the past two years. Meanwhile, fuel and transport costs have surged since the removal of subsidies, further straining household budgets.
To cope, retirees have cut down on meals, switched to cheaper food, or moved from city centres to smaller towns. Some live with relatives to reduce rents. “We are surviving, not living,” said Monsuratu Omoniyi, a retired nurse from Ibadan.
Even those earning above N300,000 a month report feeling the strain. They cite medical costs and dependents as major pressures. For many middle-class pensioners, the dream of leisure in old age has gone.
A system under strain
The pension industry continues to grow nominally. The National Pension Commission (PenCom) reported total pension assets of N23.33 trillion in the first quarter (Q1) of 2025, up N816 billion from the fourth quarter (Q4) of 2024. Retirement Savings Accounts (RSAs) rose to 10.69 million, reflecting stronger employer compliance. Total contributions reached N389.17 billion, split nearly evenly between public and private sectors.
Structural gaps persist as several state governments have yet to adopt the contributory pension system, leaving retirees with unequal access to their benefits. “Many states simply fail to fund their pension obligations,” an analyst told BusinessDay. “When these workers retire, there is often nothing to pay. The massive pension liabilities we see today are the result of years of neglect.”
Experts warn that without inflation control, even contributors under the Contributory Pension Scheme (CPS) could face long-term insecurity. “The real issue is not just payment but value,” said Idris Oyekan, a Lagos-based capital market analyst. “A pension that arrives late and loses purchasing power is almost as bad as having none at all.”
PenCom recovered N1.35 billion from 19 defaulting employers and referred 12 persistent defaulters for prosecution, highlighting enforcement gaps.
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Beyond numbers: the human cost
Behind the statistics are stories of quiet resilience. In Ogun, a retired postal worker survives on N70,000 monthly while caring for a diabetic wife. In Enugu, a former nurse sells food ingredients to pay for blood pressure medication. In Abuja, a retired driver shares a one-room apartment with two grandchildren.
Old age in Nigeria is becoming harder to afford. The promise of rest after labour is fading under rising prices and shrinking income.
A call for policy renewal
Experts say reforms are overdue. “A sustainable pension system is not just a welfare issue, it signals national stability,” said Yusuf Oladehinde, an actuary. “When retirees suffer, it weakens confidence in the government and discourages the next generation from saving.”
PenCom’s Q1 2025 priorities included enforcing remittances, diversifying investments beyond government securities, expanding micro-pension coverage, which now has 186,825 contributors, and compelling states to join the contributory scheme.
How Nigeria treats its retirees will shape workers’ trust in the state. For now, most are not just counting their years, they are counting every naira.
