Bilal Rashid
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 confined mainly to the public sector, where even the defined-benefit model now faces sustainability challenges amid mounting fiscal pressures. Meanwhile, private sector employees—the majority of the workforce—lack formal retirement savings options, widening the gap as millions risk old age without secure income. Globally, many countries have addressed similar issues by adopting defined-contribution models emphasizing individual savings, backed by clear policy and regulation. Pakistan can and must learn from these experiences, adapting them to its unique demographics and cultural norms to ensure a more inclusive and sustainable pension future.
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 innovation. While the Voluntary Pension Schemes (VPS) 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 disclosure standards. By aligning policy incentives with employer participation and private sector innovation, Pakistan can build an ecosystem that delivers predictable outcomes and lasting financial security.
Ultimately, retirement security is about preserving dignity, independence and peace of mind. As lifespan rises and family support weakens, individuals need structured plans for lasting stability. A Shariah-compliant lifetime guaranteed pension is not merely a financial instrument; it is a shield against uncertainty and a gift of peace of mind. The question is no longer whether one should plan, but when — and the answer must be: now.
—The writer is Head of Marketing and Communications at Pak-Qatar Group and has more than 20 years of experience in Pakistan’s corporate and Takaful industries.
