As we celebrate International Women’s Day, it is crucial to highlight a fundamental yet often overlooked aspect of women’s empowerment—financial security in retirement. A pension is not just a financial product; it is a tool for independence, dignity, and long-term stability. However, women worldwide face significant challenges in building adequate pension savings due to wage disparities, career breaks, and financial literacy gaps.

In many Asian and emerging economies, women traditionally rely on family support in old age rather than formal pension schemes. However, with changing social dynamics, financial security is becoming increasingly essential for women’s long-term well-being.

This article explores why financial planning for women matters and how governments and institutions can support them.

The Reality: Why Women Are Left Out of Pension Systems

According to the World Bank, nearly 40% of women globally lack access to any form of pension or retirement savings, with the number much higher in developing nations. Women in informal employment or unpaid caregiving roles often do not qualify for pension contributions, leaving them financially vulnerable.

Indonesia’s Informal Workers and Pension Gaps

In Indonesia, where over 60% of the workforce is in the informal sector, women—especially those working in agriculture and domestic labor—are largely excluded from pension benefits. To address this, Indonesia introduced the BPJS Employment Scheme, a voluntary pension program for informal workers. While uptake is slow due to affordability concerns, targeted awareness campaigns have started to increase participation among women.

Mexico’s Informal Sector and Gender Pension Gap

In Mexico, over 57% of women work in the informal sector, making them ineligible for traditional pension benefits. The Mexican Government’s Universal Pension Program provides a basic pension for elderly citizens, including women who have never contributed to a formal pension scheme. While this initiative offers some financial security, experts argue that the payments are too low to support independent living, highlighting the need for better social security policies.

Bangladesh’s Informal Workers and Social Protection Gaps
Bangladesh has one of the highest rates of female labor force participation in the garment sector, yet most women do not have formal pension coverage. The Government of Bangladesh has piloted social protection programs, including small monthly pension payments for elderly women. However, the initiative is limited in scope and does not cover the majority of informal workers.

Why Financial Security Matters, Even with Family Support

1. Changing Social Structures & Migration Trends
   • Traditional family support is declining due to urbanization and migration.
   • More elderly women are living alone or without financial backing.

China’s Aging Women and the Decline of Family Support
In China, economic migration has led to many elderly women living alone in rural areas. While family support remains strong culturally, rising costs of healthcare and daily expenses have made pensions critical. The government has expanded its New Rural Pension Scheme, ensuring women can receive small but consistent payouts in their old age.

2. Financial Independence = Dignity and Choice
   • Having personal savings allows women to make decisions about healthcare, housing, and quality of life.
   • Financial dependence can lead to vulnerabilities, especially in cases of widowhood or family disputes.

India’s Widow Pension Scheme
In India, many elderly women rely on widow pensions provided by state and central governments. The Indira Gandhi National Widow Pension Scheme gives financial aid to women over 40 who lack other income sources.

3. Encouraging Small, Feasible Steps Toward Security
   • Even informal workers and homemakers can start with micro-pension plans that allow small but regular contributions.
   • Women should be encouraged to diversify savings, whether through pension schemes, government programs, or informal savings groups.

Kenya’s Mbao Pension Plan for Small-Savings Pension
Kenya’s Mbao Pension Plan allows informal sector workers, including women, to contribute as little as KSh 20 (USD 0.15) per day toward their retirement. This flexible savings model has empowered many women to secure their financial future despite irregular incomes.

South Africa’s Social Pension System
South Africa has one of the most extensive non-contributory pension systems in the developing world. The Old Age Grant provides financial assistance to elderly citizens, with women benefiting significantly due to lower lifetime earnings and financial dependence. While this system ensures a basic income for aging women, ongoing challenges include ensuring sustainability and preventing misuse of funds.

Kazakhstan’s Pension Reforms in Central Asia
In Kazakhstan, a major pension reform introduced a mandatory individual savings system to complement state pensions. However, gender pay gaps and employment breaks due to caregiving mean that women’s pension savings tend to be much lower than men’s. The government has been working on increasing employer contributions and providing incentives for women to save more.

Middle East’s Challenges with Women’s Pension Coverage
Many Middle Eastern countries have limited pension coverage for women, particularly those in informal jobs or unpaid domestic roles. In countries like Jordan and Egypt, recent pension reforms have attempted to integrate informal sector workers through voluntary savings programs, but cultural barriers and financial constraints still limit participation.

What Needs to Change? Policy-Level Solutions

Governments and financial institutions must take steps to make pension schemes more inclusive for women, particularly those in informal work or caregiving roles.

• Recognizing Unpaid Care Work: Many women spend decades raising children or caring for elders but receive no pension benefits for this labour.
  • Example: Argentina’s Pension Credit for Mothers grants retirement benefits to women for the years they spent caring for children, recognizing their unpaid work in household economies.
• Expanding Micro-Pensions and Financial Literacy Programs:
  • Encouraging low-cost, flexible pension plans like Kenya’s Mbao scheme.
  • Providing targeted financial education to help women understand retirement planning.
• Improving Access and Removing Barriers:
  • Simplifying pension enrollment for informal workers and homemakers.
  • Addressing cultural and institutional barriers that prevent women from participating in savings schemes.

Conclusion: Financial Security is Empowerment

While family support remains vital in many cultures, women must be encouraged to think beyond traditional structures for their long-term financial well-being. Whether through micro-savings, government pensions, or financial literacy programs, every step toward financial independence enhances dignity, security, and decision-making power.

This International Women’s Day, let’s advocate for policies that recognize unpaid labour, make pensions accessible, and promote financial inclusion for women worldwide.