IN the recent announcement of the Budget 2025 , the Malaysian government unveiled a substantial enhancement to the i-Saraan programme.
This improvement entails increasing incentives from 15% to 20%, with a maximum annual contribution of RM500.
The primary objective of this initiative is to promote retirement savings among informal workers and individuals with variable incomes, particularly those engaged in the gig economy.
This strategic move is particularly significant in light of Malaysia’s rapidly ageing society and the financial challenges confronting self-employed and gig economy workers.
The gig economy in Malaysia has witnessed significant expansion over the past decade, attracting a substantial portion of the workforce, including young adults and individuals seeking alternative employment arrangements.
While offering flexibility and independence, this sector presents several challenges, particularly regarding financial security and retirement planning.
Gig workers often lack the benefits and protections associated with traditional employment, such as employer-sponsored retirement plans, health insurance and job security, leading to financial instability and hindered ability to save consistently for the future. Recent data underscores the limited participation of gig workers in Malaysia’s Social Security Organisation (Socso), highlighting the neeed for tailored solutions to support this growing segment of the workforce.
As Malaysia’s population ages, the importance of accumulating sufficient retirement savings cannot be overstated. The anticipated rise in healthcare and long-term care costs underscores the essential need for individuals to possess adequate funds to support themselves during their later years.
Many gig workers may struggle to afford necessities and healthcare in old age without proper savings. The i-Saraan programme, administered by the Employees Provident Fund, aims to address this issue by providing a platform for informal workers to save for retirement. The programme offers a government incentive to match a percentage of the contributions made by participants, thereby encouraging more people to save.
The recent increase in incentives for the i-Saraan programme represents a strategic effort to stimulate participation and savings among gig workers. By raising the matching contribution from 15% to 20%, the government aims to enhance the attractiveness and benefits of the programme.
This enhancement implies that for every RM100 contributed by a participant, the government will add RM20, up to a maximum of RM500 annually.
This increase in incentives is expected to yield several positive impacts: higher incentives are likely to attract more gig workers to join the programme, increased participation will assist more individuals in building a financial cushion for their retirement, and more significant savings will encourage participants to contribute more regularly and consistently.
By accumulating more savings, gig workers can attain heightened financial security in their retirement years, reducing their reliance on government assistance and family support.
Malaysia’s ageing population significantly challenges the country’s social and economic systems. With the anticipated increase in the proportion of elderly citizens, there will be heightened demand for healthcare services, long-term care and social support.
Ensuring that all workforce segments, including gig workers, are financially prepared for retirement is imperative.
The i-Saraan programme, with its enhanced incentives, plays a pivotal role in this context. By encouraging gig workers to save for retirement, it will help alleviate some of the pressures associated with an ageing society. This will promote a culture of financial responsibility and long-term planning among informal workers.
While enhancing the i-Saraan programme represents a positive step, additional measures can be taken to support gig workers further.
Enhancing awareness about the i-Saraan programme and its benefits is crucial, as many gig workers may not know how to participate. Targeted campaigns can help bridge this knowledge gap.
Simplifying the process of enrolling in the i-Saraan programme and making contributions will encourage more gig workers to participate.
In addition to the matching contributions, other incentives such as tax breaks or additional government grants can further motivate gig workers to save.
Developing a broader social protection framework encompassing health insurance, unemployment benefits and other safety nets for gig workers will provide a more holistic approach to their financial security.
The increase in incentives represents a commendable initiative addressing the unique challenges that gig workers face in Malaysia.
By enhancing the i-Saraan programme, the government is taking a proactive stance in supporting the financial well-being of gig workers and addressing the broader societal implications of an ageing population.
The writer is a research fellow at the Ungku Aziz Centre for Development Studies, Universiti Malaya. Comments: letters@thesundaily.com
