The National Pension Commission (PenCom) has urged younger Nigerians to start saving for retirement early, warning that delaying contributions might considerably cut back the wealth they accumulate over their working lives.
Omolola Oloworaran, the fee’s director-general, gave the recommendation on Monday throughout the youth engagement and opening ceremony of the 2026 National Pension Week, scheduled to run from 26 to 30 October.
Ms Oloworaran mentioned folks ought to begin pension planning throughout their productive years somewhat than when retirement approaches, stressing that early contributions let savings develop via compound returns.
“Your pension is not about the day you stop working; it is about the decision you make whilst you are still working,” she mentioned.
She defined that PenCom started the week’s actions with younger folks to encourage them to take accountability for his or her monetary futures and strengthen participation in Nigeria’s pension system.
According to her, the fee is searching for to construct a pension system that accommodates the altering nature of labor, together with entrepreneurship, freelancing, expertise and different types of self-employment.
“The old pension system was built for a different world: one employer, one salary, 35 years in office. So let me make you a promise: we will not ask you to fit into an old system. We will build a system that fits the work that you do,” she mentioned.
Early savings, compound returns
Ms Oloworaran illustrated the advantages of beginning early with two hypothetical workers, Tolu and Emeka, who every save N10,000 month-to-month however start contributing at completely different ages.
She mentioned Tolu begins at age 20 and saves till age 60, whereas Emeka begins at 40 and contributes the identical quantity till retirement.
According to her illustration, Tolu would contribute roughly N4.8 million over 40 years, whereas Emeka would contribute N2.4 million over 20 years.
Assuming an annual return of 15 per cent, compounded over the respective intervals, she mentioned Tolu’s savings might develop to about N113 million, in contrast with roughly N13 million for Emeka.
She mentioned the illustration confirmed how beginning early might produce considerably better retirement savings, even when month-to-month contributions have been an identical.
“Tolu did not earn more. Tolu did not work harder. Tolu simply started earlier, and that is the power of compounding,” she mentioned.
Ms Oloworaran acknowledged the monetary pressures confronting younger Nigerians, together with hire, household obligations, training prices and the rising value of residing.
However, she urged younger Nigerians, together with these within the informal sector, to make saving a part of their monetary habits as their earnings enhance.
“The greatest advantage you have is not how much you earn today. It is time,” she mentioned.
PenCom targets informal workers
The director-general mentioned Nigerians don’t want formal employment to start out making ready for retirement, pointing to the Personal Pension Plan as an choice for folks exterior the standard employer-employee association.
She mentioned entrepreneurs, artisans, farmers, freelancers, expertise professionals and content material creators might contribute in direction of retirement savings based mostly on their circumstances.
“You no longer have to wait for a formal job before you start saving for retirement,” she mentioned.
Ms Oloworaran additionally pledged to make pensions simpler to know and entry, enhance digital providers, strengthen oversight of pension operators and incorporate suggestions from younger Nigerians into the system.
She mentioned youthful workers more and more anticipated velocity, transparency, and digital entry, including that pension suppliers wanted to make it simpler to open accounts and take part.
“If a young Nigerian can order food in two clicks, opening a pension account must not take one day to open,” she mentioned.
She additionally inspired younger folks to stability present spending with long-term monetary safety, warning in opposition to letting present consumption habits undermine their future wellbeing.
“Real financial success is not just what enters your account. It is what you keep, what you build and what you protect,” she mentioned.
Financial literacy, savings tradition
At the occasion, Arese Ugwu, the appearing managing director of the National Association of Securities Dealers (NASD), lamented that Nigerian faculties and universities didn’t adequately train monetary literacy and retirement planning, leaving many younger folks with out the information wanted to handle their funds.
She urged younger earners to construct a savings tradition early, no matter earnings stage or competing monetary obligations.
“If you don’t learn how to set aside income for your savings or your future when you have 10 naira, you’re not going to be able to learn how to set aside income when you have 100 million,” she mentioned.
Ms Ugwu advisable budgeting as a place to begin, suggesting that people allocate 70 per cent of their earnings to residing bills, 20 per cent to long-term monetary targets and 10 per cent to emergency savings.
She mentioned distinguishing between cash saved for rapid spending and cash reserved for long-term monetary safety was important to constructing wealth.
Moreover, Timi Agbaje, managing companion at Versed Attorneys, mentioned pension communication wanted to mirror the rapid issues and aspirations of youthful Nigerians somewhat than focus solely on retirement at age 60.
He mentioned messages about pensions typically didn’t resonate with younger folks going through excessive rents, monetary pressures and uncertainty about their careers.
According to Mr Agbaje, pension campaigns might entice better curiosity by presenting savings as a method of attaining independence, freedom and monetary selections.
“When we start selling independence, freedom, and choices, young people can connect with that,” he mentioned.
He additionally urged pension stakeholders to make use of social media and acquainted digital tendencies to encourage younger folks to debate their savings habits and make retirement planning extra related to their on a regular basis lives.
Pension contributions administration
Omonzele Okpere, a fund supervisor at Stanbic IBTC Pension Managers, additionally highlighted the significance of compound returns and beginning early.
She defined that contributions accrued over time might present monetary help when people might now not earn earnings via their traditional work.
READ ALSO: PenCom targets pension for every working Nigerian, seeks EFInA data to drive inclusion
Ms Okpere additionally outlined how Nigeria’s contributory pension system operates, explaining the respective roles of PenCom, pension fund directors (PFAs) and pension fund custodians (PFCs).
She mentioned the fee regulates the system, PFAs administer retirement savings accounts, and PFCs obtain and maintain pension contributions.
According to her, contributions are invested throughout completely different asset lessons, together with money-market devices, treasury payments, bonds, authorities securities and various investments, according to regulatory pointers.
“So the funds are invested in assets like money markets, fixed income instruments like your treasury bills, your bonds, your government securities, alternative assets. The goal is to diversify the portfolio such that risk in the long term is diversified,” Ms Okpere added.
Under the contributory pension association she described, employers contribute no less than 10 per cent of an worker’s month-to-month emoluments, whereas staff contribute 8 per cent, bringing the mixed contribution to 18 per cent.
Ms Okpere mentioned the separation of regulatory, administrative and custodial obligations helps safeguard pension contributions.
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