Every society is judged by how it treats its elders. In Pakistan, where family values remain a cornerstone, we have traditionally relied on informal support systems to look after our retirees. However, with demographic shifts, rapid urbanization, and a persistent inflation rate, these traditional safety nets are under unprecedented strain. The question we must confront is simple: how do we ensure our elders can live with dignity and financial independence in the decades ahead?
For decades, Pakistan’s pension system has been overwhelmingly confined to the public sector. Yet even here, the long-term viability of the defined-benefit model is being challenged as fiscal pressures mount. The government’s unfunded pension liability, estimated to be a significant portion of GDP, poses a serious systemic risk. Meanwhile, private sector employees, who constitute the vast majority of our workforce, have largely been left without formal retirement savings options. The result is a widening chasm, where millions risk entering their golden years without a secure income stream.
Globally, many countries have successfully navigated this challenge by shifting towards defined-contribution models that emphasize individual savings, supported by clear policy and robust regulation. This shift has not only eased long-term fiscal burdens but also expanded access to formal retirement solutions. Pakistan can and must draw on these lessons, but our solutions must be tailored to our unique demographics, income profiles, and cultural norms.
The urgency is clear. While inflation stood at a high of approximately 12.63% in 2024, it has since dropped significantly to 3.2% as of June 2025. Yet even with this welcome decline, the long-term threat to fixed incomes and accumulated savings remains real. Reliance on family support, while culturally important, no longer offers the predictability households need in an increasingly urban and mobile economy. Without structured savings and income solutions, the risk of financial insecurity in old age will only grow.
Meeting this challenge requires more than just policy statements; it demands a fundamental change in mindset. Retirement planning must evolve from an afterthought into an essential part of every individual’s financial life. Key to this is fostering financial literacy, implementing automatic or default savings options where possible, and developing simple, transparent products that build public trust. The aim should be to create a system that is easy to join, easy to understand, and dependable over the long term.
The private sector has a critical role to play in bridging Pakistan’s pension gap by offering inclusive, accessible, and culturally aligned solutions. This is where innovation, guided by Shariah principles, can create impactful change. As an example, Pak-Qatar Family Takaful has taken a significant step with the launch of Pakistan’s first Shariah-compliant lifetime guaranteed pension plan, the Lifetime Kafalat Plan. This product is designed to provide a guaranteed, lifelong monthly income, ensuring savings are not outlived. With contributions starting as low as Rs. 500 per month and options for continuation to spouses or nominees, it extends financial security to families in a way that reflects local values, while complimentary Takaful coverage adds an additional layer of protection against unforeseen events.
Policy and regulation must keep pace with this innovation. While the Voluntary Pension Schemes (VPS) already provide a framework and tax incentives, their uptake remains limited. Priorities should include broad-based education campaigns, workplace retirement programs that encourage consistent contributions, and clear, consumer-friendly disclosure standards. These steps are crucial to translating good policy into widespread participation.
Ultimately, retirement security is about more than numbers on a balance sheet; it is about preserving dignity, independence, and peace of mind. No one should be forced to rely entirely on their children or extended family to meet their basic needs in later life. As family structures evolve, formal pension arrangements become essential to preserving social cohesion.
Pakistan has a narrow window to act, while today’s young workforce can still benefit from decades of compounding savings. By aligning policy incentives with employer participation and private sector innovation, we can build a balanced ecosystem that shares responsibility fairly and delivers predictable outcomes. Learning from global best practices while designing for local realities will be critical.
Retirement security cannot be left to chance. As lifespans increase and traditional family support systems weaken, every individual needs a reliable, structured plan to safeguard their future. A Shariah-compliant lifetime guaranteed pension is not merely a financial instrument; it is a shield against uncertainty, a commitment to one’s dignity, and a gift of peace of mind for loved ones. For Pakistan to move towards a more resilient and equitable financial future, it is imperative that individuals begin taking ownership of their retirement planning today. The tools now exist, accessible, culturally aligned, and designed for lifetime security. The question is no longer whether one should plan, but when. And the answer must be: now.