The Contributory Pension Scheme (CPS) has witnessed a remarkable surge in workers tapping into their pension accounts for mortgage loans, as the National Housing Fund (NHF) struggles to address the country’s estimated 28 million housing unit deficit.
According to data from the National Pension Commission (PenCom), the number of workers using part of their retirement savings to invest in personal homes rose by 1,271% within the first year of the pension mortgage scheme’s implementation.
This translates to 2,971 RSA holders accessing N28.9 billion for equity contribution towards residential mortgages between Q2 2023 and Q1 2024.
Industry experts attribute this trend to the cumbersome and restrictive nature of the NHF, which has failed to provide affordable housing for Nigerians despite mandatory contributions from workers.
The NHF’s limitations have led to frustration among contributors, with less than 40% successfully obtaining loans.
In contrast, the PenCom mortgage scheme offers more flexible eligibility criteria, allowing contributors to access up to 25% of their RSA balance after five years of contributions. Married couples and self-employed individuals are also eligible.
Stakeholders, including the Nigeria Labour Congress and pension operators, commend the pension mortgage scheme’s potential to enhance contributors’ benefits and positively impact the economy.
STATISTICS
– 2,971 RSA holders accessed N28.9 billion for mortgage loans between Q2 2023 and Q1 2024.
– 1,271% increase in workers accessing pension mortgage scheme within the first year.
– 28 million: estimated housing unit deficit in Nigeria.
– N21 trillion: estimated market value of housing deficit.- 40%: percentage of NHF contributors who have successfully obtained loans.
EXPERT INSIGHT
“The successful implementation of this initiative would improve people’s welfare and move the country forward.” – Olumide Oyetan, former President, Pension Fund Operators Association of Nigeria.
“The objective of this initiative is to provide housing for first-time homeowners and improve the standard of living of RSA holders under the CPS.” – Ibrahim Kangiwa, Head of Investment Department, PenCom.
Source: Vanguard.
