Planning for retirement has evolved from a mere afterthought to a pressing necessity in Bangladesh. The rise in life expectancy and the burgeoning middle class have shifted the country’s focus: how can we ensure today’s savings are enough for tomorrow’s needs? The cornerstone of achieving this is financial literacy, a crucial yet often overlooked element.

The Growing Necessity of Financial Literacy

In Bangladesh, several financial products, from banks’ long-term deposit plans to insurance companies’ annuities, are available to anyone aspiring for financial security in retirement. With the introduction of the National Pension Scheme in 2023, more opportunities to plan structured retirements have opened up. However, these well-thought-out schemes can only succeed if people understand their function and see the value in long-term savings.

National Pension Scheme: A Bold Framework

The National Pension Scheme has made commendable strides in reaching out to private and informal sector workers. Through its various modules, it aims to cater to diverse citizens, granting monthly pensions post-retirement. Yet, participation rates, especially in rural areas, remain lacking, largely due to a deficiency in financial understanding.

Bridging the Digital and Educational Gap

To boost participation, the infusion of financial literacy from an early stage is essential. Introducing financial education in school curricula is a step in the right direction, but it must be complemented by active engagement from employers and financial institutions. Digital tools could further democratize access to retirement planning, with calculators and apps enhancing understanding.

Cultivating Trust and Transparency

Trust remains a vital component in improving participation rates. Convincing previously excluded informal workers of the Scheme’s reliability requires consistent communication and transparency. Financial literacy drives need to be more than just rhetoric; they must be backed by proven success stories and tangible results. As stated in New Age BD, this trust-building is essential to the Scheme’s long-term success.

A Collective Responsibility

Ultimately, retirement planning is a shared obligation among individuals, institutions, and the government. A garment worker in Narayanganj or a migrant worker sending money from abroad deserves the dignity of a well-planned retirement. Emphasizing financial literacy and building trust are key to transforming Bangladesh’s pension scheme from mere policy into a promise fulfilled.

With an integrative approach that encompasses education, digital innovation, and institutional accountability, Bangladesh can foster a retirement-ready society. Only then will the National Pension Scheme shine as more than an initiative; it will become a testament to Bangladesh’s commitment to a secure aging population.

Md Rashed Akter is the head of retail distribution division, financial literacy wing and chief bancassurance officer at Midland Bank PLC.