Pension Inflows Rise 42% as Over 91% of Personal Pension Accounts Remain Dormant

By Benson Daniel

Quarterly contributions under Nigeria’s Personal Pension Plan rose by 42.46 per cent to N147.16 million in the first quarter of 2026, highlighting stronger savings among active contributors despite a high level of dormant accounts.

Data from the National Pension Commission’s Q1 2026 pension industry report showed that contributions increased from N103.30 million in the fourth quarter of 2025, representing a quarterly increase of N43.86 million. Cumulative contributions under the scheme have now reached N1.66 billion since inception. 

However, the increase in inflows has been accompanied by weak account activity. PenCom recorded 219,316 registrations under the scheme from inception to the end of the first quarter, but only 18,811 accounts, representing 8.6 per cent, had received contributions.

This means 200,505 registered accounts, or 91.4 per cent, remained dormant, underscoring the difficulty of converting pension registration into sustained retirement savings.

The Personal Pension Plan is particularly important for Nigeria’s informal sector, where workers do not typically have the automatic employer and employee deductions that support participation in the formal Contributory Pension Scheme.

For informal workers, contributions are generally voluntary and depend heavily on income patterns and the ability to set aside money regularly. Fluctuating earnings and pressure on household finances can therefore make long term retirement savings difficult to sustain.

The latest figures suggest that while existing contributors are increasing the amount of money going into their pension accounts, a much larger challenge remains in activating the millions of registered but unfunded accounts.

The growth in quarterly contributions nevertheless signals increasing participation among those already committed to the scheme. It also indicates that voluntary pension savings can expand when contributors have convenient channels and sufficient disposable income.

Stakeholders have continued to emphasise the need for stronger financial education, easier payment systems and greater engagement with informal sector groups to improve participation.

Technology could also play a significant role. Mobile based payment channels, automated micro deductions and flexible contribution options could make it easier for traders, artisans, self employed professionals and other informal workers to contribute regularly, even when their incomes vary from month to month.

The large number of dormant accounts remains a significant concern for Nigeria’s pension industry because registration alone does not guarantee retirement security. Without regular contributions, registered workers may eventually reach retirement age with insufficient pension savings.

PenCom and pension fund operators therefore face the dual task of sustaining the recent growth in inflows while finding ways to bring dormant accounts back into active contribution.

If successful, greater activation of these accounts could significantly deepen pension coverage and strengthen long term financial security for workers outside the formal employment system.