Delays worsen for retirees as debt pressure mounts amid Sh207 billion pension payout
Kenya’s rising pension obligations have become a major concern for the Treasury after payouts crossed the Sh200 billion mark for the first time, even as thousands of retirees continue to suffer delays in receiving their dues.
In the financial year ending June 2025, the government spent Sh207.19 billion on pension and gratuities, representing a steep 39 per cent jump from the previous year’s Sh148.9 billion.
This figure accounts for 92.8 per cent of the Sh223.14 billion set aside for pensions that year, and highlights the scale of financial pressure facing the Exchequer.
Pensioners have continued to raise complaints over late payments, with the government struggling to release funds on time amid growing financial demands.
The Treasury failed to disburse Sh23 billion in pension payments during the year to June 2024, worsening the situation for many retired civil servants.
“There have been challenges when pensioners leave employment and wait for too long to get their payment, mainly because of system challenges. There are also other issues behind the delayed payment of pension,” Treasury CS John Mbadi recently said.
The number of pensioners has been steadily rising and now stands at over 260,000. This number is expected to grow further, with at least 85,000 public servants projected to exit service between last year and June 2026 after reaching the retirement age of 60.
The ballooning pension bill is now one of the biggest spending areas under the Consolidated Fund Services (CFS), joining public debt and salaries of constitutional office holders. In the year to June 2025, pension payments took up 11.6 per cent of all CFS disbursements, a rise from 8.4 per cent the year before.
However, public debt repayment continues to dominate CFS spending. Treasury figures show that 87.1 per cent of the Sh1.79 trillion CFS budget in the year to June 2025 was used to service debt, slightly down from 90.3 per cent in the previous financial year when the CFS budget was Sh1.766 trillion.
The sharp increase in pension expenditure has also triggered debate over future budget sustainability. Over the past four years, pension spending has gone up by 87.8 per cent - from Sh110.36 billion in the 2020/2021 financial year to the Sh207.19 billion spent by June 2025.
Amid the pressure, the Treasury rejected a proposed law that sought to peg public pensions to inflation, a move meant to shield retirees from rising living costs. The government, however, plans to introduce a cost-of-living adjustment specifically for judges' pensions.
With more civil servants expected to retire and growing debt demands continuing to squeeze the national budget, the rising pension bill remains one of the most urgent fiscal challenges facing the government today.
In the financial year ending June 2025, the government spent Sh207.19 billion on pension and gratuities, representing a steep 39 per cent jump from the previous year’s Sh148.9 billion.
This figure accounts for 92.8 per cent of the Sh223.14 billion set aside for pensions that year, and highlights the scale of financial pressure facing the Exchequer.
Pensioners have continued to raise complaints over late payments, with the government struggling to release funds on time amid growing financial demands.
The Treasury failed to disburse Sh23 billion in pension payments during the year to June 2024, worsening the situation for many retired civil servants.
“There have been challenges when pensioners leave employment and wait for too long to get their payment, mainly because of system challenges. There are also other issues behind the delayed payment of pension,” Treasury CS John Mbadi recently said.
The number of pensioners has been steadily rising and now stands at over 260,000. This number is expected to grow further, with at least 85,000 public servants projected to exit service between last year and June 2026 after reaching the retirement age of 60.
The ballooning pension bill is now one of the biggest spending areas under the Consolidated Fund Services (CFS), joining public debt and salaries of constitutional office holders. In the year to June 2025, pension payments took up 11.6 per cent of all CFS disbursements, a rise from 8.4 per cent the year before.
However, public debt repayment continues to dominate CFS spending. Treasury figures show that 87.1 per cent of the Sh1.79 trillion CFS budget in the year to June 2025 was used to service debt, slightly down from 90.3 per cent in the previous financial year when the CFS budget was Sh1.766 trillion.
The sharp increase in pension expenditure has also triggered debate over future budget sustainability. Over the past four years, pension spending has gone up by 87.8 per cent - from Sh110.36 billion in the 2020/2021 financial year to the Sh207.19 billion spent by June 2025.
Amid the pressure, the Treasury rejected a proposed law that sought to peg public pensions to inflation, a move meant to shield retirees from rising living costs. The government, however, plans to introduce a cost-of-living adjustment specifically for judges' pensions.
With more civil servants expected to retire and growing debt demands continuing to squeeze the national budget, the rising pension bill remains one of the most urgent fiscal challenges facing the government today.
National Treasury
Treasury
Director of Pensions
Pension fund
Consolidated Fund Services
Let’s Connect
We’re here to listen, support, and engage with you.
Whether it’s feedback, a request, or collaboration — Hon. Yusuf Hassan’s team welcomes your message.
Office Address
Kamukunji Constituency Office, Nairobi
Call
+254 737 500200, +254 716 667733
“Leadership is not about position — it’s about purpose, people, and progress.”