Kenya’s public pension bill has for the first time surpassed the Sh200 billion mark, underscoring the growing financial strain on the Exchequer already grappling with delays in disbursing payments to retired civil servants.
Data from the National Treasury shows that Sh207.19 billion was spent on pensions and gratuities in the financial year ending June 2025—a 39 percent increase from the Sh148.9 billion spent in the previous year.
This surge means pension payments now account for 11.6 percent of total disbursements under the Consolidated Fund Services (CFS), up from 8.4 percent a year earlier.
Despite the increased budget, pensioners continue to face delays in receiving their dues, with the Treasury previously failing to remit Sh23 billion owed to retirees in the year ending June 2024.
“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 delayed payment of pension,” Treasury Cabinet Secretary John Mbadi recently explained.
Of the Sh223.14 billion allocated for pension and gratuities for the 2024/25 financial year, the Treasury utilised 92.8 percent, amounting to Sh207.19 billion. This marked the first time the allocation exceeded the Sh200 billion threshold.
Pension and gratuities, public debt repayment, and salaries of constitutional officeholders remain the primary expenditures under the CFS. Public debt continues to consume the lion’s share, with 87.1 percent (Sh1.59 trillion) of the Sh1.79 trillion CFS budget in the 2024/25 fiscal year directed towards servicing debt. This is slightly down from the 90.3 percent (Sh1.56 trillion) spent the previous year.
Currently, the number of retirees is estimated to be over 260,000, with at least 85,000 public servants expected to retire by June 2026 after attaining the mandatory retirement age of 60.
The government is increasingly burdened by the rising pension bill, which continues to expand alongside mounting public debt obligations. A proposal to adjust pensions in line with inflation was recently rejected by the Treasury, although a cost of living adjustment is being considered for judges’ pensions.
Pension expenditure has grown by 87.8 percent over four years—from Sh110.36 billion in the 2020/21 financial year—intensifying scrutiny of the Treasury amid rising complaints over the delays pensioners endure when seeking their entitlements.
