Old Mutual Report Shows 70 Percent of Kenyans Facing Income Decline and High Stress
Economic confidence wanes as cost of living, taxes and job market challenges persist.Only 30 percent of Kenyans consistently meet expenses with surplus income 85 percent recognize the importance of retirement savings, but only 7 perfect feel financially pre
A newly released report by Old Mutual reveals that 70 percent of Kenyans experienced a decline in income in 2024, while nearly half (47 percent) of the workforce reported significant stress, citing financial strain as a leading cause.
The second edition of the Old Mutual Financial Services Monitor (OMFSM), launched today in Nairobi, provides a snapshot of financial trends among urban and peri-urban Kenyans aged 20 to 59 who earn KES 12,000 or more per month.
This group makes up approximately 63 percent of the country’s working-age population (15-64 years).
The report paints a concerning picture of economic uncertainty, with many Kenyans losing confidence in the economy compared to 2023. While some held optimism last year, most have now adopted a neutral stance amid rising inflation, higher taxes, food price surges, and a struggling job market.
As a result, only 3 in 10 Kenyans report that their household income consistently covers all expenses with money left over at the end of the month.
Many have been forced to adjust their lifestyles, cutting back on non-essential expenses such as entertainment, dining out, and travel. Some families are moving children to more affordable schools, opting for cheaper brands and even relocating to smaller homes to cope with economic hardships.
With formal employment opportunities shrinking, many Kenyans are turning to entrepreneurship to supplement their incomes. The report highlights that 50 percent of Kenyans now own a business, though only 30 percent of these ventures are formally registered.
Alarmingly, just 16percent of businesses have insurance coverage, leaving them financially vulnerable in case of unexpected challenges.
“As the OMFSM 2024 reveals, traditional employment alone is no longer sufficient for many households. More Kenyans are seeking alternative income streams,” said Anthony Mwithiga, Group Managing Director, Old Mutual Investment Group.
“One of the most notable trends is the rise of the informal economy people are offering services like tutoring, food delivery, and selling second-hand goods to stay afloat,” he added.
Despite current financial struggles, Kenyans are increasingly recognizing the need for long-term financial security. The report notes that 85 percent of Kenyans acknowledge the importance of saving for retirement yet only 7 percent feel confident they will have enough for retirement, a sharp drop from 12 percent in 2023.
Encouragingly, the number of people actively saving for retirement has risen from 26 percent in 2023 to 36 percent in 2024. However, many still rely on employer pension schemes, savings groups (Chamas), and personal investments, which may not be sufficient for a financially secure retirement.
The OMFSM 2024 report underscores the urgent need for improved financial planning and economic stability as Kenyans navigate ongoing challenges.
“While financial hardships persist, Kenyans are showing resilience and adaptability, constantly finding new ways to survive and succeed despite economic difficulties,” Mwithiga noted.
