Almost 70 percent of Kenyans will fall short of their aspiration – Report

Last updated on September 11th, 2021 at 03:09 pm

A new report released by Standard Chartered Bank now reveals that with a wealth expectancy of 63.6 million shillings($626,421) many Kenyans will fall short of their aspirations.According to the report, by 60 years of age, 66 percent of Kenya’s savers will be less than half way to achieving their wealth aspiration, while almost a third (32 per cent) will be more than 80 per cent away from their target.
Standard Chartered’s new “Wealth Expectancy Report 2019”, which examines the saving and investment habits of 10,000 emerging affluent, affluent and high-net-worth individuals (HNWIs) across 10 fast-growing economies, reveals a universal challenge.
People’s aspirations outstrip their ‘wealth expectancy’, or their total net wealth at age 60, notes the report.
According to the report, this “compares to a global trend where nearly six out of 10 people on average across the markets surveyed are facing a ‘wealth expectancy gap’ of 50 percent or more.”
Kenyan savers are more driven to start or fund a business than individuals in any other market in the study, with more than a quarter (27 percent) citing this as one of their top three financial goals, noted the report.
According to the report, the average wealth expectancy of Kenyans with enough disposable income to save and invest is 63.6 million shillings,( 626,421) or 45.3 million shillings ($447,444)for the emerging affluent, 68.4 million shillings ($676,137) for the affluent and 77.2 million shillings ($765,626) for high-net-worth individuals.
On average, this would give people in Kenya 222,000 Kenya shillings($22,000) to live on per month during retirement, much less than both their current income and their wealth aspiration.
“If they were to spend at the average monthly rate to which they aspire, their wealth expectancy would last the emerging affluent 6 years, the affluent 8 years of retirement, while HNWIs would be able to fund 5 years,” notes the report.
Standard Chartered’s Wealth Expectancy Report 2019 uncovers that savers in Kenya combine simple savings products with stocks and shares to achieve their goals.
Nearly six out of 10 Kenyans say they want to invest more (58 percent), but they lack access to financial advice.
Funding their children’s education, buying land, establishing or funding their own business and investing in property are the most common aims are the most common aims for savers in Kenya.
“Identifying as high net worth or affluent now is not an indicator of being able to achieve your wealth aspiration in future. With 56 per cent of savers in our study looking set to be disappointed with their financial situation when it comes to retirement, the time to take action is now,” said Edith Chumba, Head of Retail Banking at Standard Chartered Kenya.
“Financial institutions have an important role to play, starting with an understanding of their clients’ needs, so that they can educate and empower them to manage their wealth in line with their aspirations,” she added.