New pension products aim to end retirement struggles for informal workers

Earning a living outside formal employment, retirement has often meant uncertainty, dependence, or continued struggle well into old age, but new pension solutions are now placing informal workers at the center, offering them a long-overdue chance to plan ahead and secure dignity in later life.

Old Mutual Pension Services Company has on April 22, 2026, launched the Voluntary Pension and Programmed Withdrawal products, which aim to open up structured retirement planning to both formal and informal workers such as vendors, small-scale traders, and the self-employed, groups that have historically been excluded from mandatory pension systems.

Speaking during the launch, Tawonga Manda, Old Mutual Pension Services Company General Manager said the products are designed to break barriers that have prevented informal workers from accessing reliable retirement savings tools.

Manda said the Voluntary Pension product, in particular, is a game changer for the informal sector, as it allows individuals to contribute at their own pace, depending on their income flows.

Unlike traditional systems tied to formal employment, this product gives informal workers flexibility and control, making it possible to save even with irregular earnings.

“Voluntary Pension is a retirement plan vehicle that is open to everybody who would like to plan for their retirement. As you are aware, some people are on the Mandatory Pension, but these are people in the formal sector.

“But we are also aware that there are people in the informal sector who want to supplement their mandatory pension, then voluntary pension is available. Its an important opportunity for those that are in the informal sector who really want to plan for their retirement, but they didn’t have an opportunity,” Manda said.

He emphasized that even those already contributing to mandatory pension schemes can use the voluntary option to supplement their savings, strengthening their financial position in later years.

On the other hand, the Programmed Withdrawal product directly addresses one of the biggest challenges retirees face, how to manage their pension funds after retirement.

Unlike traditional annuities, which provide fixed monthly payments, this product gives retirees flexibility and control over how they access their money.

They can choose to withdraw funds monthly, quarterly, or annually, depending on their personal needs and financial plans.

“This is about giving people ownership of their retirement,” Manda said, noting that retirees will no longer be confined to rigid payout structures but can instead tailor their income to match their lifestyles.

Beyond flexibility, the products also carry financial advantages.

The Voluntary Pension, being specifically designed for retirement, benefits from lower tax rates on investment returns compared to ordinary savings or investment plans.

This means workers are able to grow their savings more efficiently over time, maximizing what they will eventually receive.

Manda further highlighted that accessibility has been built into the system to ensure a smooth transition into retirement.

Because contributions are individually managed, unlike employer-dependent schemes, delays caused by unpaid remittances are eliminated.

When a member retires, their funds are readily available, with payouts processed quickly and efficiently.

The introduction of digital access also allows contributors to track their savings in real time, giving them clarity and confidence about their financial position long before retirement.

In addition, the company is strengthening financial literacy through dedicated education programs and partnerships within its broader financial services network.

This ensures that workers are not only saving, but also making informed decisions about their future.