Formal Retirement Savings offer security many retirees wish they had
Tuesday, July 28 2026 1:13 pm
By Julius Businge, Financial Journalist
In many parts of Uganda, older citizens who spent decades working, farming, or running small businesses are now discovering the financial challenges of retirement without formal savings.
Their experiences are increasingly being cited by financial planners as powerful reminders of why structured retirement saving, particularly through schemes such as the National Social Security Fund (NSSF) can make a critical difference in old age.
William K. Mbeihwa, 53, from Kikonge village in Kibaale Town Council in Kibaale district, spent most of his working life as a truck driver and later as a private plumber. Like many self-employed Ugandans, he never enrolled in a formal saving scheme. Today, partially sighted and limited in the amount of work he can do, he depends on occasional light plumbing jobs with assistance from others.
His main form of saving over the years was buying land, building a home, and keeping a few heads of cattle, assets he believed would sustain him later in life.
“I knew about NSSF but did not have the opportunity to save with it because I was self-employed for most of my working life,” he says. “However, it is a good idea to save with NSSF because the savings generate interest without the owner having to monitor them constantly, unlike animals, land, or daily business activities. I encourage my children, who are now working, to take advantage of saving with NSSF because I believe the money there is safe and does not require constant supervision.”
Mbeihwa says that if he had saved consistently with NSSF during the years he worked privately, he believes he would now be financially stronger due to the accumulated interest. He also recalls losing some livestock to theft over the years, losses that weakened his retirement security.
Regrets and reflections
Similar reflections come from Godfrey Edward Kabagambe, 57, a resident of Kihumuro in Kakumiro District, who spent much of the 1990s engaged in small-scale business. Like many entrepreneurs at the time, he relied on land purchases, farming, and supporting his family rather than contributing to a formal retirement scheme.
“For someone who has done business, losses are inevitable,” Kabagambe says. “In those days, we did not have enough information about how NSSF works, so we spent our money on land, farming, and raising our children instead of saving formally.”
He adds, “I now suffer from severe back pain that requires specialized treatment, but I do not have the money for it. I stay at home and cannot work. If I had saved with NSSF, perhaps I would have had money in retirement to meet my medical needs.”
Financial experts say such experiences are increasingly common among retirees who relied entirely on informal saving methods that can depreciate, be stolen, or fail to generate regular income when physical ability declines.
A life built on discipline
The story of Charles Karoli, an 80-year-old retired businessman and farmer from Buhuumi village near Karuguuza Trading Centre in Kibaale District, provides another important lesson.
Although he never enrolled in a formal pension scheme, his disciplined saving habits allowed him to build businesses and property that now support him in retirement. Yet even his success, analysts say, demonstrates how combining personal investments with formal retirement savings could provide even greater financial stability.
Born on April 13, 1945, Karoli grew up in a humble rural household where resources were limited. Financial challenges forced him to leave school early, pushing him into employment at a young age. His first job, teaching at Karama Primary School for a monthly salary of Shs30, marked the beginning of a lifelong habit of saving small amounts consistently.
Over time, he used savings to purchase a bicycle, later trained as a tractor driver, and eventually started a small water-tank manufacturing business in Kampala in 1974. Profits from the business were reinvested into land, rental housing, and commercial property development, including the construction of Eureka House in Karuguuza Trading Centre in the early 1990s, which today hosts the Stanbic Bank Bwamiraramira Branch.
Rental income from his properties continues to support him today, while he oversees cattle farming at his ancestral home. His life demonstrates the value of discipline, but also highlights how participation in a structured pension scheme could have provided an additional guaranteed income stream in retirement.
Why formal saving matters
Financial planners say that traditional assets such as land, livestock, and small businesses remain important investments, but they often require active management, are exposed to market uncertainties, and may not provide reliable monthly income when individuals are no longer able to work.
Formal retirement savings schemes, on the other hand, provide structured accumulation, compounded interest, and predictable long-term benefits that help individuals meet health, household, and emergency expenses later in life.
National data reinforces the urgency of building a stronger saving culture. Findings from the 2024 National Population and Housing Census show that only about 42 percent of Ugandans aged 16 years and above reported saving money through any mechanism, while approximately 58 percent said they do not save at all.
Policymakers say the figures highlight the need to expand financial literacy and encourage greater participation in formal saving systems, particularly among young workers and the self-employed.
Financial regulators also observe that many Ugandans who save do so irregularly or primarily for short-term needs, limiting their ability to build long-term financial resilience. Encouraging consistent contributions to pension schemes such as NSSF – now offer voluntary saving products under the current law, along with savings in regulated banks and SACCOs, is increasingly seen as essential to protecting households against retirement poverty and unexpected financial shocks.
A call for a saving culture
The experiences of retirees such as Mbeihwa, Kabagambe, and Karoli collectively send a powerful message: income earned during working years does not automatically translate into security in old age. Informal assets can help, but they do not always provide the stability, protection, and predictable growth that formal retirement savings offer.
Authorities continue to call on individuals, employers, and financial institutions to promote saving as a lifelong habit, beginning with small but consistent contributions that grow over time.
For many Ugandans entering the workforce today, the lesson from older generations is increasingly clear—combining traditional investments with structured retirement savings, especially through institutions like NSSF, may be the most reliable path to financial independence in retirement and protection against emergencies.
