Saudi Arabia Launches Pension Program to Cut Remittances
Saudi Arabia Plans Public Pension Program to Boost Savings, Cut Remittances
RIYADH — Saudi Arabia is taking steps to encourage household savings and reduce the outflow of money sent abroad, as part of a broader strategy to strengthen financial resilience among residents.
The Kingdom is expected to soon unveil its Public Pension and Savings Program, a voluntary scheme aimed at helping individuals build long-term savings.
Foreign remittances from Saudi Arabia climbed by 14 percent in 2024, reaching SAR 144.2 billion (USD 38.4 billion). Over the past decade, total remittances have totaled SAR 1.43 trillion, highlighting the large financial outflow from the country, largely driven by its expatriate workforce.
As of the first quarter of 2025, there were 12.8 million active subscribers in Saudi Arabia’s social insurance system. Around 77 percent—approximately 10 million—are non-Saudis, underscoring the system’s heavy reliance on expatriate contributions.
The International Monetary Fund (IMF) noted that pension reforms approved in July 2024 aim to ensure the system’s long-term fiscal sustainability. Key changes include raising the retirement age, extending contribution periods, increasing contribution rates, and tightening benefit eligibility. While these reforms are unlikely to deliver immediate fiscal gains, the IMF stressed the importance of assessing their medium-term impact.
The forthcoming voluntary pension scheme is viewed as a positive step toward encouraging financial security for residents while reducing dependence on foreign remittances.
The IMF also highlighted the substantial assets managed by the General Organization for Social Insurance (GOSI), estimated at 32 percent of Saudi Arabia’s GDP, calling for greater financial transparency and clearer asset allocation policies.
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