Saudi Arabia to launch a pension and savings programme for foreign workers

Highlights: Saudi Arabia Opens Pension Savings Plan to Foreign Workers for the First Time

• Saudi Arabia will include foreign workers in its upcoming voluntary pension and savings programme for the first time.
• The aim is to boost domestic savings and curb rising remittance outflows, which reached SR144.2 billion ($38.4 billion) in 2024.
• Foreign workers make up 77% of the country's 12.8 million social insurance subscribers (Q1 2025).
• The scheme follows reforms that raised the retirement age, contribution periods, and contribution rates.
• The IMF supports the programme and has called for greater financial transparency in Saudi’s social insurance assets.

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Big Reform Ahead: Saudi Expands Pension Scheme to Expats

Saudi Arabia’s upcoming Public Pension and Savings Programme is set to be a game-changer for foreign workers, including the large Indian expat community. For the first time, expats will have the option to participate in a structured savings system within the Kingdom—aimed at encouraging long-term financial planning and reducing reliance on outward remittances. In 2024 alone, foreign workers remitted over SR144.2 billion ($38.4 billion), highlighting the scale of funds leaving the country each year.

The initiative is part of broader pension reforms passed in July 2024, which included raising the retirement age, extending contribution periods, and increasing rates. As of the first quarter of 2025, foreign nationals accounted for 77% of the 12.8 million social insurance subscribers in Saudi Arabia.

The International Monetary Fund (IMF) has praised the move, stating it could significantly strengthen household savings and enhance the sustainability of the pension system. However, it also urged Saudi authorities to maintain financial transparency, especially in managing the General Organization for Social Insurance (GOSI)—whose assets make up about 32% of the Kingdom’s GDP.

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What Indian Workers Should Know about Saudi Arabia’s New Pension Scheme

Here are the key takeaways Indian expats in Saudi Arabia should keep in mind:

• Voluntary Participation: The scheme will be optional, allowing foreign workers to contribute if they choose to start saving within Saudi Arabia.
• Encourages Local Savings: Designed to reduce remittances, the programme aims to help expats retain and grow their income locally through structured savings.
• Target Audience: Indian professionals and workers, who form a major share of Saudi’s expat population, stand to benefit from long-term financial planning tools.
• Social Insurance Context: As of Q1 2025, 77% of 12.8 million social insurance subscribers in Saudi Arabia were foreign nationals—highlighting the importance of including them in savings reforms.
• Further Details Awaited: Exact contribution rates, withdrawal conditions, employer roles, and return on investment details are yet to be officially announced.
• Advice for Expats: Keep track of updates from Saudi Arabia’s Ministry of Human Resources and Indian missions for official guidelines and enrolment information.
   

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