Saudi Arabia to extend new pension and savings plan to expatriates

Dubai: Saudi Arabia is set to roll out a new voluntary pension and savings programme that will, for the first time, extend to foreign workers as well as Saudi nationals, according to the International Monetary Fund’s (IMF) latest Article IV consultation report, cited by Al Eqtisadiah.

The programme, known as the Public Pension and Savings Programme, is expected to be announced soon and is designed to boost household savings while reducing the massive outflow of remittances abroad.

Last year, foreign workers in Saudi Arabia sent home SR144.2 billion ($38.4 billion), a 14 percent increase from the previous year. Over the past decade, cumulative remittances have reached SR1.43 trillion.

As of the first quarter of 2025, Saudi Arabia’s social insurance system counted 12.8 million subscribers, nearly 77 percent of them expatriates.

The new scheme would give these workers an opportunity to save and invest locally rather than sending most of their earnings abroad.

The move comes on the heels of major pension reforms approved in July 2024, which raised the retirement age, extended contribution periods, increased contribution rates, and narrowed benefits.

The IMF said the measures will improve the system’s long-term sustainability, though immediate fiscal savings are unlikely.

The IMF welcomed the new savings programme as an important step, noting it could “significantly enhance household savings and reduce external remittances.”

It also highlighted the scale of the General Organization for Social Insurance’s (GOSI) assets, which stand at roughly 32 percent of GDP, and urged greater financial transparency and clearer investment allocation.