RIYADH: Saudi Arabia has an opportunity to strengthen its retirement system and unlock billions of riyals in long-term domestic investment, according to a BlackRock report, which found that while many workers are financially confident today, fewer are adequately prepared for retirement.
The “Read on Retirement: GCC 2026” report argues that expanding workplace retirement savings plans and encouraging long-term investing could improve financial security for individuals while supporting Saudi Arabia’s Vision 2030 goals of diversifying the economy and deepening capital markets.
The findings come as the Kingdom continues to reform its financial sector, with initiatives aimed at increasing household savings and expanding investment opportunities for both Saudi nationals and expatriates.
“Developing robust retirement systems is not just a social imperative, it is a capital markets opportunity,” Kashif Riaz, head of BlackRock Riyadh Investment Management and Middle East Financial Advisory, said.
“By moving toward funded, long-term savings frameworks, Saudi Arabia can mobilize domestic capital at scale, channeling household savings into productive investment, deepening local markets, and supporting the Kingdom’s broader economic diversification agenda,” he added.
Saudi-expat retirement confidence gap
The study found that 75 percent of workers in Saudi Arabia have either started saving or are planning for retirement. However, only 57 percent regularly save or invest, while just 24 percent contribute to pensions or dedicated long-term savings plans.
The report also revealed a significant divide between Saudi nationals and expatriates. While 59 percent of Saudis said they feel financially prepared for retirement, only 41 percent of expatriates shared the same confidence, largely because many rely on personal savings rather than structured pension schemes.
Overall, half of respondents expect personal savings and investments to fund their retirement, while only 6 percent anticipate relying on employer-sponsored retirement plans. More than one-third of Saudi nationals expect public pensions to remain a key source of retirement income.
The survey also highlighted how household wealth is currently allocated. Nearly half of respondents hold their savings in cash, 40 percent invest in gold and only 18 percent own property, suggesting that much of the country’s household wealth is not invested in long-term growth assets.
‘Start saving from day 1’
For many retirees, the report’s findings reflect personal experience.
Mohsen Ibrahim, a Saudi retiree in his seventies, told Arab News that although he understood the importance of planning for retirement, he struggled to put those plans into action.
“When I retired, I didn’t feel financially prepared,” he said. “Long before my retirement, I was aware of the consequences and obligations that I’d be facing. However, I mismanaged my finances and didn’t put solid plans in place. Even when I did make plans, I didn’t stick to them.”
Looking back, Ibrahim believes financial discipline should begin as soon as people enter the workforce.
“My first advice to young Saudis is to start saving from your first day of employment or your first paycheck,” he said. “I would assume at least 50 percent of your income, no matter how big or small your salary is. Then, the second step is laying out a primary financial plan.”
Saudi financial analyst Talaat Hafiz told Arab News that strengthening retirement savings could deliver benefits far beyond individual financial security.
“A stronger retirement savings system could play a transformative role in advancing Saudi Arabia’s economic development,” he said.
“By generating a stable pool of long-term domestic capital, retirement funds can be invested across equities, fixed income, infrastructure and private markets. This enhances capital market liquidity, supports business growth and reduces reliance on short-term financing.”
Hafiz said retirement reform aligns closely with Vision 2030’s objective of increasing household savings from 6 percent to 10 percent of household income.
“Strengthening the retirement savings system is not solely about enhancing retirement security; it is also about mobilizing long-term domestic savings to support economic transformation,” he said.
He added that countries with mature pension systems generally enjoy deeper and more resilient capital markets, creating a virtuous cycle between household savings and economic growth.
Knowledge gap
Despite widespread interest in saving, many workers remain uncertain about how to prepare for retirement. According to the report, only 21 percent of Saudi nationals said they are confident they understand their retirement options.
Among the biggest obstacles identified were limited access to unbiased financial information, uncertainty over how much to save and confusion about available retirement products.
The report found that 36 percent of respondents did not know where to find impartial financial guidance, while 32 percent were unsure how much they should be saving and 26 percent did not know what retirement savings options were available.
Hafiz said the issue is not a lack of willingness but a lack of confidence.
“Limited financial literacy, concerns about investment risk and a cultural preference for tangible assets such as real estate and gold continue to discourage many people from investing for the long term,” he said.
“Improving financial literacy, expanding access to retirement savings products and building public confidence in long-term investing would enhance individual retirement preparedness while supporting Saudi Vision 2030.”
The report also found strong support for workplace retirement programs.
Among Saudi nationals, 95 percent said defined-contribution workplace savings schemes were appealing, while 91 percent said they would consider participating.
Workers who already had access to workplace retirement plans also reported significantly higher levels of retirement confidence than those without such schemes.
For expatriates, Hafiz said Saudi Arabia already offers a broad range of investment opportunities, including more than 360 mutual funds and access to the Saudi stock market.
However, introducing voluntary employer-sponsored retirement plans with matching contributions could encourage more disciplined long-term saving.
He also pointed to recent government initiatives designed to encourage a stronger savings culture, including the General Organization for Social Insurance’s GOSI Jameya, a rotating savings product for retirees, and the Ministry of Finance’s Sah Government Savings Sukuk Program, which offers individuals an accessible government-backed savings instrument.
Looking ahead, Hafiz believes Saudi Arabia is moving in the right direction but said the next phase should focus on expanding voluntary retirement savings programs, improving financial literacy, encouraging greater private-sector participation and using digital technology to make retirement planning more accessible.
“Ultimately, retirement savings should not be viewed simply as a social policy,” he said. “It is also an economic strategy that supports financial security for individuals while providing long-term capital that contributes to sustainable economic growth and diversification.”
