Saudi Arabia to introduce voluntary pension and savings scheme for Saudis and expats

According to the most recent Article IV consultation report from the International Monetary Fund (IMF), which was reported by the Al-Eqtisadiah newspaper, Saudi Arabia is getting ready to unveil a new optional pension and savings program that will be accessible to both Saudi and foreign employees.

It is anticipated that the initiative will assist reduce the outflow of workers' remittances overseas and increase household savings. It is expected that the Public Pension and Savings Program would shortly be introduced.

Last year, Saudi Arabia's foreign remittances increased by 14% to SR144.2 billion ($38.4 billion). Between 2015 and 2024, they came to a total of SR1.43 trillion.

Of the 12.8 million people enrolled in Saudi Arabia's social insurance system as of the first quarter of 2025, 77 percent, or about 10 million, were foreigners.

According to the IMF assessment, the July 2024 approval of recently completed pension reforms is anticipated to improve long-term financial sustainability. The retirement age was raised, the contribution periods were extended, the contribution rates were raised, and the pension benefits were restricted as part of these reforms.

The IMF emphasized the need to thoroughly evaluate and reveal the medium-term impact, even if the adjustments are unlikely to result in immediate budgetary savings because the system is now balanced.

Both Saudis and foreigners are eligible to participate in the forthcoming voluntary pension and savings scheme, which has been hailed as a positive move that might greatly increase household savings and lower the need for external remittances.