Thailand faces retirement savings gaps as population ages

Thailand’s pension system faces growing demographic pressure, according to Kiatnakin Phatra Financial Group (KKP), which projects that people over 60 will represent a third of the population within the next 25 years. The group puts their current share at 24%.

KKP’s study found that more than 54% of workers lack social security coverage and that the old-age allowance meets only around 7% of living expenses. Pipat Luengnaruemitchai, the group’s chief economist, said government welfare alone would not provide an adequate retirement income and warned that benefits could decline over the next 20 years.

As many as 86% of Thais either have no savings plan or have been unable to maintain one, the study found. More than 80% of savings are held in deposits and other low-risk assets, whose returns typically fail to match inflation.

Longer lifespans and healthcare costs add to the pressure. KKP projects that around 47% of people reaching 60 will survive to at least 85, while medical cost inflation in Thailand is forecast at 14.8% in 2026. Pipat said insurance co-payment arrangements were also increasing policyholders’ share of medical bills.

KKP also introduced a retirement investment strategy with two stages: building savings before retirement and providing regular income afterwards. Its offerings include funds targeting retirement in 2035 and 2045.