2026 Budget: Pension gets N10.8trillion, insurance N17.3b

The 2026 federal budget has revealed fresh insights into how Nigeria plans to support its insurance and pension sectors, with clear emphasis on pension obligations, while insurance appears to remain on the margins of fiscal attention.

This has raised concerns among industry experts over the long-term impact of underinvestment in risk protection and financial inclusion.

According to budget documents analysed by The Nation, the government allocated N17.3 billion for group life insurance to cover federal workers and NYSC members, a statutory requirement under the Pension Reform Act.

However, stakeholders say the allocation reflects compliance rather than strategic growth in a sector critical for national resilience.

In contrast, the pension sector commands a far larger slice of the 2026 budget, with N10.75 trillion projected for personnel costs, including pensions and gratuities. Of this, about 1.4 trillion is tied to direct pension benefits, showing the government’s ongoing commitment to meeting retiree obligations.

The National Pension Commission (PenCom) is also expected to implement the approved N32,000 minimum pension for retirees and resolve outstanding liabilities, including those from legacy schemes. Efforts to harmonise data and expand coverage continue under PenCom’s digital transformation programme.

Despite these strides, the insurance sector remains underfunded and underutilised as a tool for public safety and economic protection.

Experts have flagged the absence of any major provision for risk education, disaster cover, or support for high-risk sectors such as markets and SMEs.

“This is a missed opportunity,” said a financial analyst, Rotimi Opeyemi. “Insurance plays a vital role in fire recovery, business continuity, and protecting lives especially in a country facing climate, health, and economic risks. Budgeting should reflect that.”

Worse still, insurance penetration in Nigeria remains below one per cent, with fewer than 2 million individuals and businesses covered in a population of over 200 million.

Another analyst, Mrs. Patience Obineme blame poor awareness, low trust, and lack of government leadership in expanding access.

Meanwhile, PenCom is preparing to launch a new health insurance scheme for pensioners named PenComCare this year. Though funding specifics were not detailed, the initiative signals a shift toward holistic retiree welfare beyond monthly stipends.

The experts have however called for policy realignment this year to ensure both pensions and insurance are treated as pillars of national stability.

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Without this, millions may remain vulnerable to shocks and financially excluded in the moments they need protection most.