Nigeria’s pension industry is having its best years. Assets under management in the Contributory Pension Scheme have grown from ₦20.79 trillion in July 2024 to ₦31.48 trillion in July 2026, a 51 per cent rise in two years, and the fastest expansion since the scheme began. The number of retirees drawing benefits has climbed past 800,000. Administrators are now required to process retirement benefits within 48 hours. By any measure, the system is working better than it ever has.

And yet the number that ought to trouble us has barely moved. Roughly 11.3 million Nigerians hold Retirement Savings Accounts in a workforce of more than 80 million. Somewhere between 65 and 70 million working Nigerians, consisting of traders, artisans, drivers, tailors, mechanics, food vendors, freelancers, small business owners all remain outside any retirement provision at all.

This is the untapped goldmine, and the argument for reaching it has not changed. What has changed and what this piece is really about is the diagnosis. A year ago, the informal sector’s problem looked like enrolment. The evidence now says the problem is activation, and that distinction should reshape how the entire industry spends its outreach budget.

What the industry has already got right

It is worth being fair to the regulator before criticising the outcome. The National Pension Commission has not ignored this gap. The Micro Pension Plan has been rebuilt and repositioned as the Personal Pension Plan, stratified into categories that recognise how differently a market trader and a freelance consultant earn. Accredited Pension Agents have been licensed to take onboarding out of branch offices and into communities. A dedicated foreign-currency fund now exists for Nigerians in the diaspora. Under the Pension Revolution 2.0 agenda, informal-sector coverage has been named explicitly as the next frontier of reform.

These are the right moves. The design problem has largely been solved: contributions can be small, irregular and cash-based, and a portion remains accessible for emergencies rather than locked away for forty years. A trader in Balogun can now open a regulated pension account in minutes.

The number nobody wants to discuss
The trouble is what happens next. Of the roughly 215,000 informal-sector pension accounts registered under the scheme, only about 17,000 barely eight per cent were receiving active contributions as at the end of 2025. More than nine in ten are dormant: opened, counted, reported, and never funded again.

Registration is happening. Contribution is not. We have been measuring the wrong thing, and celebrating it.

That single ratio reframes everything. If the barrier were awareness, registration numbers would be low and funding rates high among those who signed up. Instead, the reverse is true. People are hearing the message, agreeing with it in the moment, filling in the form and then never coming back. Whatever is failing is failing after the signature, not before it.

This matters commercially as well as socially. A dormant account is a cost centre: it consumes onboarding effort, administration and reporting, and it generates nothing for the contributor, the administrator or the economy. Five million dormant accounts would be a headline and a liability at the same time.

Why a funded account is harder than a registered one

Anyone who has stood in a Nigerian market and talked about pensions knows the questions that decide whether money actually moves. They are rarely about returns.

The memory of the old system. Decades of unpaid gratuities and pensioners dying in verification queues did not disappear because a new Act was passed in 2004. The person you are speaking to has watched an uncle wait. The word “pension” itself is a door-closer in many markets a branding problem the industry has not seriously confronted.

The three unanswered questions. Is this money still mine? Can I reach it if trouble comes? Who is holding it, and who is watching them? Until all three are answered by someone credible and unhurried, a form gets signed out of politeness and nothing follows.

Income that arrives in a rhythm nobody designed for. A trader who earns daily cannot think in monthly deductions, and a bad month is not an exception but a season. Products now allow flexibility; the conversation often still assumes a salary rhythm.

No second visit. Registration is frequently a one-day event. Nobody returns in week six, when the novelty has faded and the money is needed elsewhere. Habits are not formed by a single visit, and saving is a habit before it is a product.

The fear of being defrauded. Fair or not, a stranger asking for money in a market carries a burden of proof. Trust is not transferred through a leaflet.

What actually converts
If the industry accepts that activation rather than registration is the constraint, four things follow and none of them requires a new regulation.

Education before onboarding. A registration desk is not an outreach strategy. The three questions above must be answered properly in plain English, Pidgin or the local language before a form appears. Twenty minutes of honest explanation converts better than a banner and a queue.

Deliver inside structures that already exist. Market associations, artisan councils, transport unions, cooperatives and faith groups already meet weekly, already have leadership with authority, and already carry the trust that a visiting institution lacks. Slot into their meeting rather than convening your own. Borrowed trust is the entry ticket.

Activate in the same moment. Education, registration and the first contribution should all happen in the same sitting, at the same table. Every day between understanding and funding is a day for the money to be spent on something else.

Then come back. A message on day three, a nudge at week two, a call at day sixty, a return visit at ninety days. Unglamorous, cheap, and almost entirely absent from current practice and also the difference between an account and a saver.

Rebrand at street level
There is a harder recommendation, and the industry will resist it: at the grassroots, stop leading with the word “pension.”

This is not dishonesty. It is sequencing. The word arrives carrying thirty years of baggage that the Personal Pension Plan does not deserve, and it triggers a refusal before the product can be explained. Lead instead with what the person actually wants, money kept safe for tomorrow, still theirs, reachable in an emergency, small amounts welcome and introduce the formal scheme once trust is established. Campaigns built around ideas such as “tomorrow money” or “small small savings” will out-convert campaigns built around the word “pension” in any Nigerian market you care to test.

Pay for outcomes, not attendance
The industry’s outreach spending currently rewards the wrong thing. Agents, campaigns and partners are typically measured and paid on registrations. Registrations are precisely what we now have in abundance and cannot convert.

Change the unit. Engage grassroots financial educators and accredited agents on the basis of accounts still funded at ninety days, rather than accounts opened on the day. The economics immediately favour explanation over recruitment, follow-up over volume, and small trusted networks over crowds. It will produce smaller headline numbers and a far larger pension system.

Government has a role here too, and a cheap one. A modest matching contribution for the first year of informal-sector saving, even at a low ceiling would do more for activation than any awareness campaign, because it makes the first contribution visibly profitable rather than merely virtuous. Bundling a small life or health cover with a funded account would do the same, since protection today is more tangible than income in thirty years.

Why the clock matters
The cost of getting this wrong is not abstract. Nigeria’s population is young now, which is exactly why it will be old later. The informal worker who is 35 today is 65 in 2056 with no pension, no employer, and children who may be supporting their own families in another country. The bill arrives as pressure on families, on state welfare systems that do not exist, and on a political system that will be asked to fix it retroactively, the same way the pre-2004 pension crisis was eventually fixed, at enormous cost.

There is also a quieter risk to the industry itself. A pension system holding ₦31 trillion for 11 million people, in a country of 220 million, invites a question it will not enjoy answering: whose retirement is this for? Coverage is what converts an impressive asset pool into a national institution.

The next number to celebrate
Nigeria’s pension industry has proven, decisively, that it can grow assets and administer them well. The ₦31 trillion is real, the reforms are real, and the confidence is earned.

The next test is different in kind. It will not be won with a bigger campaign or a faster app, but with patient, unfashionable work: sitting in market meetings, answering the same three questions honestly, coming back in six weeks, and measuring success by the number of accounts still being funded three months later.

The future of pensions in Nigeria depends not on how much is managed, but on how many are included and now, on how many keep contributing after the form is signed.

Oladimeji Ajibawo (DMJ) is a capital markets and pensions professional with over 20 years’ experience, spanning Meristem Securities and nine years at First Registrars Nigeria Limited. He pioneered the share registrar function at NPF Pensions and has led nationwide financial-sensitisation campaigns across a federal institutional workforce. He is Principal Consultant at Mawmoni Advisory and the author of A Beginner’s Guide to Retirement Planning.

Figures cited are drawn from PenCom industry reports and public statements up to July 2026; informal-sector account data are as at end-2025.