Amid the worsening cost of housing and declining purchasing power, more workers under the Contributory Pension Scheme, CPS, are turning to their pension savings to raise equity contributions for residential home ownership loans.

The development comes against the backdrop of the country’s widening housing deficit, estimated at 14.9 million units, with experts putting the funding requirement for bridging the gap at about N21 trillion.

Despite the establishment of the National Housing Fund, NHF, as a financing mechanism to make home ownership funding more accessible to workers, the scheme has failed to meet the funding crises.

Financial Vanguard findings in the data of the National Pension Commission, PenCom, showed that a total of 28,437 pension contributors resorted to their Retirement Savings Accounts, RSAs, for home ownership equity contribution in the first quarter of 2026 (Q2’26), representing a 284.3 per cent increase from 7,399 recorded in the fourth quarter of 2025 (Q4’25).

Also the data shows a total of N92.7 billion was withdrawn by these pension account holders from their RSAs for equity contributions towards residential home ownership in Q1’26, a 227.9 per cent surge from N28.27 billion in Q4’25.

The sharp increases in both the number of contributors and the amount accessed highlights the growing reliance on pension savings as workers struggle to meet the rising financial requirements for home ownership.

The trend also underscores the widening gap between workers’ incomes and the cost of acquiring residential property, particularly as rents and mortgage-related costs continue to rise.

However, industry experts are of the opinion that the huge increases in the number of pension account holders resorting to RSA for home ownership loans highlights the increasing role of RSA balances in supporting access to affordable housing for working class Nigerians.

They argued that before the pension option for home acquisition became available, workers were plagued with arbitrary revocation of Certificate of Occupancy, CoO, by state governments, regulatory bottlenecks, naira depreciation and macroeconomic headwinds.

They stated that most public servants for whom the NHF scheme was made mandatory, not only find the process of securing loans cumbersome, the requirements are also hardly met by majority of contributors thereby defeating the laudable objectives of the scheme.

But under the current pension scheme the PenCom guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person for access to pension savings for home ownership.

PenCom guideline

It will be recalled that the Contributory Pension Scheme, CPS, allows contributors known as Retirement Savings Account, RSA, holders to access 25 per cent of their RSA balances as equity contributions for residential mortgage payments.

This benefit is available to active RSA holders who have contributed to the CPS for a minimum of 60 months and are seeking to purchase their first homes, in line with the provisions of Section 89(2) of the Pension Reform Act 2014.

The PenCom guideline stated: “Where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required; where 25 per cent is not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.; where 25 per cent is not sufficient for equity contribution, Personal Pension (PP) contributor may utilise contingency portion in line with PP guidelines; where 25 per cent is insufficient as equity contribution, RSA holder shall deposit the difference with the mortgage lender.”

Stakeholders’ insight

Lamenting the huge housing deficit in the country, President of the Nigeria Labour Congress, NLC, Joe Ajaero, in a recent presentation, argued that although the government had been consistently deducting the mandated 2.5 per cent from workers’ salaries, the Federal Mortgage Bank of Nigeria had failed to inform the workers about the deposits made into their National Housing Fund accounts.

According to him, the lack of communication has created frustration among workers, who find themselves unable to effectively capitalise on the benefits that the scheme should provide.

He said: “Administrative bottlenecks in the process of accessing the mortgage scheme have created room for corruption in the system. While the Act provides for 90 days from the date of application for the loan to disbursement, the experiences by many workers are horrific as the undue delay in approving the loans forces many workers to abandon pursuit of the loan.

“Many resort to third-party agencies to fast track the loan application at unofficial fees, thus, creating perception of corruption in the process of housing loan approval and disbursement to workers who needed the funds.

“Despite the increase in the total pool in NHF, workers were still unable to get loans to get shelter.”

Also speaking, Mr. Michael Simire, an Urban Planner and environmentalist stated that the naira devaluation and the worsening economic situation of the country are preventing many Nigerians from owning their own homes.

He stated: “Money might not be readily available for people to invest in home ownership, however, the pension scheme is making it possible for a lot of people to have their own homes.

“Despite the fact that the National Housing Authority existed long before now, you will see lots of vacant properties, office spaces, residential spaces, all vacant, because people could not afford them’’.

Also speaking, Director, Centre for Pension Rights Advocacy, Mr. Ivor Takor stated: “Before now, Nigerians have canvassed for government to execute acceptable programmes for Nigerians to access affordable housing by securing a regular and continuous provision of the necessary financial means. The inclusion of home ownership in the pension scheme is highly commendable.

“In addition to that, Nigerians that are not on the pension scheme should have access to loans at moderate interest rates and such facilities should be supplemented by other suitable methods of direct and indirect financial assistance such as subsidies, tax concessions, and appropriate private, co-operative and public owning of housing.”

Also speaking, Principal Partner of M.I Okoro and Associates, Mr. Meckson Innocent Okoro, said that allowing workers to use part of their pension savings to acquire homes is highly commendable, as the economic situation of the country has caused a low demand for residential mortgage.

He stated: “The way the economy is now, demand and supply in the real estate sector is low. Even when there is supply, it is not as much as it used to be because the high exchange rate has pushed up the cost of everything in the sector.

‘‘Consequently, the price and demand for real estate is not in the reach of an average investor. So it is only very few people who have huge money that go into real estate right away.

“Also, the long payback period is discouraging investors from the sector. If the price of a real estate is too high, the payback period will also be too long. For instance, if a property that used to cost say N30 million now costs N90 million because of the way things are going in the country, if the payback period would have been in five years time, now you are looking at 15 years time. But with the pension scheme coming into the real estate sector, we expect to see moderation in pricing as well as boost in home ownership”

Speaking on the steady rise in the number of workers going for the pension mortgage scheme, former President, Pension Fund Operators Association of Nigeria, PenOp, Mr. Olumide Oyetan, said the residential mortgage scheme will enhance contributors benefits and impact positively on the economy.

Oyetan stated: “The successful implementation of this initiative would improve people’s welfare and move the country forward.” (Vanguard)

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