Why the Poor Need Pensions and What Strategies Do They Use for Old Age Security?

Ramesh S Arunachalam

Rural Finance Practitioner

As Table 1 suggests, there are several challenges that old people face and they have very few means for overcoming these challenges.

The case for micro-pensions can never be argued more strongly as these people suffer dual oppressions – being old and on top of that, being poor as well.

In terms of preparing for old age, the poor use several strategies including:

·         Investment in Assets (Cash or kind (Land/House), etc.)

·         Investment in Children – that is often why poor have many children, thus resulting in larger family sizes, which ironically prevents savings at a younger age

·         Save Cash (Different options)

·         Informal Groups and

·         Other temporary strategies including high cost borrowing

Therefore, there is an urgent need to enable the elderly to prepare for old age and the time for micro-pensions has never been stronger…

Cheers

Have a Nice Day

Ramesh