84.9m informal workers face retirement without safety net

By Victor Ahiuma-Young The National Pension Commission, PenCom, is stepping up efforts to expand pension coverage among Nigeria’s self-employed and informal sector workers, as an estimated 84.9 million people remain without pension coverage, exposing a significant gap in the country’s retirement security system. Figures presented at the 2026 Annual PenCom Media Conference in in Lagos, showed that although the informal sector accounts for an estimated 93 per cent of Nigeria’s workforce, only 242,690 informal sector workers had enrolled in the Personal Pension Plan, PPP, as of July 2026.

The figures, based on estimates of the informal sector workforce, put pension coverage among the group at just 0.29 per cent, highlighting the challenge facing efforts to bring millions of traders, artisans, farmers, professionals and gig workers into the pension system. The Personal Pension Plan was introduced under Section 2(3) of the Pension Reform Act, PRA, 2014 to extend pension coverage to self-employed persons and workers in the informal sector who may not have access to conventional employer-sponsored retirement savings arrangements.

The scheme allows eligible contributors to make flexible payments daily, weekly, monthly or at their convenience, depending on their income and circumstances. Registration requires a National Identification Number (NIN) and a phone number, while prospective contributors can register directly with a Pension Fund Administrator (PFA) or through an accredited pension agent.

However, the presentation identified several obstacles to wider participation, including irregular earnings, limited awareness, distrust of financial institutions, preference for readily accessible savings, geographical barriers and gaps in digital literacy. For many informal sector workers, whose earnings may fluctuate considerably, setting aside money for retirement can be difficult when contributions compete with immediate household and business expenses The presentation also noted that access to a pension account does not necessarily translate into sustained savings, as some contributors may register without making regular or subsequent payments.

It stressed that the success of the Personal Pension Plan should therefore be measured not only by the number of registered accounts but also by active contributors, frequency of contributions, consistency of saving, average account balances and the adequacy of retirement benefits. Under the Plan’s contribution structure, 50 per cent of contributions constitutes the contingent portion, which may be withdrawn three months after the initial contribution and subsequently once every two months.

The remaining 50 per cent is designated for retirement benefits and is accessible from age 50, or earlier in cases of medical incapacitation, subject to applicable regulations To widen participation, PenCom has accredited pension agents to help bring the scheme closer to underserved communities and workers who may have limited access to conventional pension services.

The agents are expected to facilitate enrolment, support contributions and account updates through approved channels, and conduct public sensitisation and financial literacy activities. Six approved pension agents were listed in the presentation as having received accreditation across three dates in 2026: Awabah Remit Services Limited in February; e-Tranzact International Limited and NextAutomate APA Limited in June; and SunTrust Bank Nigeria Limited, PrimeTrust APA Limited and Majestic APA Limited in September.

The presentation further identified financial literacy, trust-building, convenient payment channels and contribution arrangements suited to irregular earnings as important areas for improving participation and encouraging long-term saving. It also highlighted the gender dimension of the challenge, citing an estimate that 96 per cent of employed women work in the informal sector, making the expansion of pension coverage particularly relevant to women whose livelihoods fall outside formal employment arrangements.

Beyond increasing enrolment, the commission’s challenge is to ensure that workers remain active contributors and accumulate sufficient savings to support them in retirement. The presentation concluded that expanding access alone would not close Nigeria’s pension gap. Sustained participation, consistent contributions and adequate retirement balances are essential to turning the Personal Pension Plan into a meaningful source of financial security for the country’s vast informal workforce.