In Mexico; seven out of ten Mexicans believe that they will live on social support in their old age

MEXICO CITY.— In 2024, seven out of 10 Mexicans considered that will live on social programs when they reach old agea shot of 11% compared to 2020, according to the study “Mexico, how are we doing with retirement savings? 2025”, carried out jointly with Vanguard.

According to the director of “Mexico, how are we doing?”, Sofía Ramírez Aguilarthe above represents a major challenge for families and public financesat a time when the federal administration has committed to achieving fiscal consolidation.

The data, based on the National Financial Inclusion Survey 2024, highlights that these resources per person are insufficient to supply a minimum food basket, which exceeds the 4,000 pesos a month.

“This has a huge challenge. First, financial education because the welfare pension today only covers 66% of a basic food and non-food basket. The essential expenses of 4,700 pesos, round numbers, 66% which is three thousand 100 pesos per monththey are what craise the welfare pension. They are not enough and go to the most basic if that is your only source of income”, assured the directive.

In his opinion, given the pressure that the public finances of the country for the heavy spending on pensions, equivalent to 6 percentage points of GDP, It is difficult to consider that social support for the country’s older adult population will continue to increase.

It is urgent to strengthen retirement savings in Mexico

In the document, it is recalled that the main destination of savings is short-term things, emergencies or unforeseen expenses, food, payment of services and health. “It is urgent to strengthen retirement savings in the face of the advance of informality“, they point out.

Both firms stressed that in Mexico, the challenge to strengthen retirement savings is worsened by the expansion of informal employment, distrust in financial institutions and the limited culture of provision. They recalled that the country has a potential formal savings market of 28 million people, 18% more than in 2022although still insufficient to guarantee a decent retirement.

The study warned that 54.5% of Mexican workers work informally, which restricts their access to social security and formal savings mechanisms. The situation is more serious among women, with 54.9% in informal employment compared to 53.9% of men.

Solo 42.2% of the population has Afore, a marginal improvement of three percentage points since 2021, but with a gender gap of 17 points: while 51.4% of men have an account, only 34.2% of women have access to one.

Sofía pointed out that the current challenge is not only to expand coverage, but also to maintain the creation of formal and quality employment in an uncertain economic environment.

The report identifies that, although Voluntary contributions to the Afores grew from 5.7% in 2021 to 7.9% in 2024most people still don’t save enough. The main obstacles are lack of income, low financial education and distrust in institutions.

Added to this is ignorance, where many people are unaware that they can make voluntary contributions or do not know how to do so, especially those who work outside the formal system.

In contrast, The use of digital accounts for savings grew significantly, going from 4.1% in 2021 to 12.1% in 2024driven by the expansion of internet access and mobile banking. For the authors of the study, digitalization has become a key tool to include new segments, especially among young people and informal workers.

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