Overview:
Uganda faces a looming old-age poverty crisis as its elderly population is projected to hit 5.4 million by 2050. While the pension sector hit a record Shs30.7 trillion in assets this year, only four million citizens are currently enrolled in formal schemes.
KAMPALA, Uganda — Uganda’s retirement benefits sector recorded a sharp 21 percent expansion in assets to Shs30.7 trillion in the year ending June 2025, yet millions of workers remain vulnerable to old-age poverty.
Data from the Uganda Retirement Benefits Regulatory Authority annual report reveals that while pension assets now account for 13.6 percent of gross domestic product, formal coverage remains restricted to just four million people. The sector’s growth was driven by an average 14.6 percent return on investment and increased financial awareness among formal employers.
The report highlights a stark divide in the labor market. Approximately 84 percent of Uganda’s 20 million workers operate in the informal sector, including farmers, traders and boda boda riders who remain largely excluded from formal savings arrangements. Without urgent reforms to bridge this gap, experts warn of a looming crisis as the elderly population is projected to more than double to 5.4 million by 2050.
In response to rising fiscal pressures, the government recently enacted the Public Service Pension Fund Act, 2025. The legislation transitions civil servants from a non-contributory system to a pre-funded contributory scheme, aiming to reduce the long-term burden on the national budget while ensuring more predictable payouts for public sector retirees.
Investment patterns within the sector remain conservative. The report indicates that 80.25 percent of pension assets are held in government securities, with 10.94 percent in quoted equities and 5.27 percent in real estate. While these low-risk allocations protect savings, regulators are weighing the benefits of further diversification into infrastructure and private equity to stimulate broader economic growth.
The retirement sector is expected to play a central role in the national tenfold growth strategy, which seeks to nearly double domestic savings to 40 percent of gross domestic product by 2040. To reach this target, policymakers are exploring digital platforms and specialized products designed to bring informal workers into the pension fold.