By LOVETH AZODO, Lagos.
Stakeholders in Nigeria’s pension and insurance industries have warned that millions of Nigerians risk slipping into poverty in old age unless urgent measures are taken to expand retirement protection and financial security within the country’s vast informal sector.
The warning came at the 2026 Inspenonline Retirement Summit 2026 held in Lagos, where regulators, pension operators, insurers, and economic experts identified the informal economy as the next major frontier for pension and insurance growth.
Delivering the keynote paper at the summit themed “Meeting Retirement Dreams of Informal Sector Workers in Nigeria: Unlocking the Next Frontier for Pension and Insurance Growth,” Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, described Nigeria’s informal sector as the single largest untapped retirement protection market within the country’s financial system.
According to him, despite accounting for over 90 per cent of employment and contributing more than half of national economic output, the overwhelming majority of informal sector workers remain outside structured pension and insurance coverage.
He warned that millions of economically active Nigerians are approaching old age without pension security, life insurance, health coverage, annuity protection, or long-term savings arrangements.
“Retirement for many informal workers still means continued labour into old age, dependence on children and relatives, liquidation of personal assets, or outright poverty,” Yusuf stated.
He argued that the future relevance and sustainability of Nigeria’s pension and insurance industries would depend largely on their ability to penetrate the informal economy, which he described as a commercially attractive but structurally underserved market.
Yusuf noted that more than 75 million informal sector workers remain outside the pension net, while insurance penetration in Nigeria remains among the lowest globally at between 0.3 and 0.5 per cent of Gross Domestic Product (GDP).
He attributed the weak retirement security culture within the sector to rigid product structures, low financial literacy, poor trust in financial institutions, and worsening macroeconomic conditions that have eroded disposable incomes.
According to him, many traditional pension and insurance models were designed around salaried employment structures and therefore fail to align with the irregular and transaction-driven realities of informal sector earnings.
“The challenge is not the absence of financial activity. The challenge is the inability of formal financial institutions to design products and distribution systems that align with the realities of informal sector economics,” he said.
Yusuf further identified trust deficit as one of the biggest obstacles confronting pension and insurance penetration, noting that many Nigerians still perceive insurance as an industry that “collects premiums but resists claims.”
To reverse the trend, he urged operators to redesign products around flexibility and affordability by allowing daily, weekly, and irregular contribution structures tailored to the realities of low-income earners.
He also advocated the integration of pension and insurance products into existing informal economic ecosystems such as cooperatives, transport unions, market associations, digital platforms, and mobile money channels.
According to him, technology has significantly changed the economics of financial inclusion, enabling low-cost onboarding, digital verification, automated collections, mobile claims processing, and real-time contribution tracking.
“The firms that will dominate the next phase of industry growth will not necessarily be those with the largest capital base. They will be institutions capable of redesigning financial protection around the realities of informal sector economics,” Yusuf added.
Other stakeholders at the summit also stressed the need for workers to intentionally plan for retirement from the early stages of their careers.
Chairman of STI Leasing Limited, Tom Ogboi, called for greater sensitisation on retirement planning, disclosing that strategic preparation had enabled him to enjoy retirement since leaving active service in 2002.
He maintained that retirement planning must be deliberate and not left to chance.
Also speaking, Media, Branding and Communications Lead of the Pension Fund Operators Association of Nigeria (PenOp), Olajumoke Akinwunmi, said the pension industry had evolved significantly to ensure retirees receive their benefits promptly.
She highlighted the Personal Pension Plan (PPP) as a flexible platform designed to encourage participation among informal sector operators, noting that Nigerians from the age of 18 can enroll.
According to her, the plan offers long-term financial support during active work years and retirement.
Representatives of the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) also urged Nigerians to embrace pension and insurance products as essential tools for long-term financial security.
PenCom disclosed that its rebranded Micro Pension Plan had been repositioned to provide more accessible and secure financial safety nets for self-employed individuals and workers in the informal sector.
Publisher of Inspenonline and convener of the summit, Chuks Udo Okonta, said the initiative was established to bridge the knowledge gap surrounding retirement planning in Nigeria.
“There is a lack of serious local advocacy on retirement matters, and we will continue this drive until every worker is fully enlightened,” he said.
Industry analysts at the summit noted that expanding pension and insurance coverage within the informal sector could significantly deepen financial inclusion, strengthen long-term domestic capital formation, and reduce poverty among ageing Nigerians.
They, however, stressed that achieving meaningful penetration would require stronger trust architecture, product innovation, digital inclusion, and coordinated public awareness campaigns across the country.
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