Pioneering Old Mutual Financial Services Monitor (OMFSM) research has found that nearly half of working adults in Kenya are members of the so-called ‘sandwich generation’, responsible for supporting both their children and parents, and possibly other adult dependants too. This sandwich generation – typically aged in their 30s to 50s – are stuck between two sides and at risk of being spread too thin.

The comprehensive study of Kenya’s working population revealed that 74% of working Kenyans have children – most of them under the age of 12, and 58% have adult dependants who rely on them financially. In many cases, these adult dependants are their ageing parents. 46% of those surveyed are members of the sandwich generation, who have both children and dependant adults to care for. Saving for their children’s education is the top financial goal for Kenyans, with 40% working towards this. Education costs also account for the highest unexpected expenses that drive Kenyans to take out loans.

As the cost of living rises and only 10% earn more than they did before Covid, it’s not surprising that almost half of working Kenyans report that they are financially stressed, and many are unable to prioritise saving for their own future needs.

While 81% agree that saving for retirement is important, only 26% have actually started saving for it. Those who are saving for retirement are doing so through pension or retirement funds, SACCOs and bank savings accounts.

For many, however, simply making ends meet is a matter of tightening their belts, taking loans and dipping into savings to cover day-to-day and unexpected expenses.

Stepping up to ease employee financial stress

For employers, it is worth noting that financial stress has a negative impact on employees’ mental and physical health. As many as 60% of working adults are not offered benefits that would ease their financial burdens, help them save for retirement and reduce the impacts of unexpected events.

In the formal sector, 66% of employees have medical or health insurance, and only 46% have pension funds, 10% have group funeral cover and 6% have group life cover. In the informal sector, only 21% of employees have medical or health insurance, with 6% or less receiving pension funds, group funeral cover or group life cover.

Only around 1 in 5 workers receive any financial information from their employer, although more than half say they believe being offered financial information would be a value-add for them. Employers can simplify benefit provision and administration by partnering with professional retirement fund and benefit package managers who have access to a wide range of investment and insurance products.

They design customised investment strategies based on the specific retirement needs of employees, and can offer insurance coverage such as health insurance to cover medical expenses, disability insurance to replace income in the event of serious illness or injury, and group life insurance to support an employee’s family in the event of both natural and accidental death. By helping employees reduce their debt and build savings for retirement, employers can both alleviate their immediate financial stress and help them build a foundation of generational wealth, so their children need not find themselves stuck in a future sandwich generation.

Even small businesses can offer employee benefits by taking advantage of pre-packaged retirement, death, funeral, disability and dread disease benefits in one simple package, with customisable contributions and a high growth default investment fund with smoothed returns. This offers employees affordable, low-risk retirement investments that also reduce the financial shock of unexpected life events.

With the right advice, as well as a choice of trusted investment and insurance products, financial wellness need not be mission impossible for Kenya’s sandwich generation.