Savings incentives reach only a minority

Thailand already offers a broad range of retirement savings tools, including provident funds, retirement mutual funds, super savings funds, Thai ESG funds, pension insurance and the National Savings Fund.

However, participation in these schemes remains low.

Thailand had about 40 million workers in 2024, but only 12.4 million people, or around 30% of the workforce, filed personal income tax returns.

As a result, tax deductions designed to encourage retirement investment benefit only a limited proportion of workers.

The measures are particularly ineffective for informal workers, many of whom have incomes outside the personal income tax system and therefore gain little or no benefit from tax-based incentives.

Financial knowledge has not led to long-term planning

TDRI found that Thai people generally displayed a reasonably good level of financial knowledge, but this had not translated into effective long-term savings behaviour.

Around 86% had either not drawn up a retirement savings plan or were unable to follow the plan they had made.

Another 77% had emergency savings sufficient to cover no more than six months of expenses.

The figures point to financial vulnerability beginning during people’s working lives and carrying through into retirement.

Without sufficient emergency reserves or regular long-term savings, workers face a greater risk of entering old age without adequate income.

TDRI proposes automatic enrolment

TDRI argued that Thailand did not necessarily need to create another retirement savings programme.

Instead, it should focus on increasing participation in schemes that already exist.

One proposal is an automatic-enrolment system under which employers or the government would place workers into retirement savings programmes by default.

Individuals who did not wish to participate would retain the right to opt out.

The approach would reverse the present system, in which workers must take the initiative to register themselves, and could help increase coverage among people who otherwise postpone or neglect retirement planning.

TDRI also recommended promoting savings from school age and developing financial-planning tools tailored to informal workers.

Such measures could help people begin saving earlier and provide workers outside the formal employment system with a more dependable source of income in retirement.

Ageing population poses fiscal challenge

The report concluded that Thailand’s central problem was not a lack of retirement savings products.

Rather, too many people had either failed to begin saving or were putting aside insufficient amounts.

This has left a large proportion of the elderly dependent on relatives and government welfare at a time when Thailand is becoming a fully aged society.

Without wider participation in retirement savings, the problem could weaken elderly people’s quality of life while placing mounting pressure on families and the government’s long-term fiscal position.