7 out of 10 Mexicans Depend on the Government for Their Old Age Expenses
Overall, 7 out of 10 Mexicans believe that they will be able to cover their old age expenses thanks to government support. The results of the most recent National Financial Inclusion Survey indicate that this option has significantly increased. According to data from Inegi, 68.2% of the population views government support as a means to meet their needs during old age, representing an 11 percentage point increase compared to 2021.
As they gain more importance, they also become costly.
The significance of the social programs promoted by the government of Andrés Manuel López Obrador, and which were even elevated to constitutional status with Claudia Sheinbaum’s mandate, is evident in the numbers. In 2022, 17.2% of Mexican households' income came from state programs, remittances, and other transfers, according to Coneval data. This is an average, as the proportion increases in more vulnerable sectors. In terms of their effectiveness as social policy, non-contributory pensions (like the Pension for Well-Being) are increasingly helping to lift elderly people out of poverty, according to a recent World Bank report. “Initially, this non-contributory pension did not cover the poverty line, both food and non-food, but since 2022, it has exceeded that line in both rural and urban areas,” clarifies the Poverty and Equity Report in Mexico from this institution. Currently, the Pension for the Well-Being of Older Adults supports 12.4 million beneficiaries with an annual social investment of 483.4 billion pesos, according to the Ministry of Well-Being. Social programs, along with remittances, have become structural factors in domestic demand, according to some analysts. For instance, Valmex states that the outlook for private consumption in 2025 is complex and filled with uncertainty, despite key factors like consumer credit, remittance assistance, and social support providing some backing. Additionally, the ENIF reports that 24.1% of initial savings accounts in towns with fewer than 15,000 residents were opened thanks to government support, compared to only 6.8% in populations of 15,000 or more. This shows how social programs are also boosting savings and financial inclusion. Pensions, both contributory and non-contributory, account for about 6% of social spending in the federal budget, reaching figures as significant as those for education and health combined for 2024.
It is truly concerning that a large portion of the population relies so heavily on government support for their future. This underscores the urgency of fostering a stronger culture of saving and investment from an early age. Citizens must be educated and motivated to plan financially for their old age, allowing them to attain a decent standard of living without solely depending on subsidies. Long-term financial stability is achieved through a combination of income, savings, and good credit management, which is vital in an uncertain economic environment.
