Nigeria’s Personal Pension Plan (PPP), created to provide retirement savings for workers in the informal sector, is facing a major setback as worsening economic hardship continues to prevent millions of Nigerians from making regular pension contributions. New data from the National Pension Commission (PenCom) shows that 92 per cent of registered Personal Pension Plan accounts remain unfunded or dormant, raising concerns about the future of retirement savings for informal sector workers.
According to PenCom’s Fourth Quarter 2025 report, the Personal Pension Plan has 215,412 registered Retirement Savings Accounts (RSAs). However, only 17,320 accounts, representing 8 per cent, have received contributions, while the remaining 198,092 accounts, or 92 per cent, have never been funded. The commission warned that registration alone does not translate into meaningful pension inclusion if contributors are unable to save.
Stakeholders attribute the poor participation largely to the country’s rising cost of living, declining household incomes and the financial pressures facing self-employed workers, artisans, traders, farmers and other informal sector participants. Many Nigerians struggling to meet daily living expenses are unable to prioritise long-term retirement savings.
To address the challenge, PenCom said it would intensify awareness campaigns and expand participation through the Accredited Pension Agent framework. The commission also plans to strengthen partnerships with cooperatives, fintech companies, telecommunications firms, trade unions and professional associations to encourage greater enrolment and sustained contributions from informal sector workers.
PenCom also expressed concern over the slow implementation of the Contributory Pension Scheme (CPS) by state governments. According to the commission, only eight states are fully compliant with the scheme, while 17 states have enacted pension laws but are yet to implement them. The commission called for stronger engagement with state governments to improve compliance and extend pension coverage nationwide.
Analysts warn that unless economic conditions improve and confidence in retirement savings grows, millions of Nigerians working outside the formal sector could face financial insecurity in old age. They argue that expanding pension inclusion will require not only stronger awareness campaigns but also policies that improve incomes, reduce poverty and make long-term savings more affordable for workers.
