Equity contributions for residential mortgages under Nigeria’s Contributory Pension Scheme (CPS) have recorded an unprecedented surge, rising 279 per cent year-on-year in the first quarter of 2025.
According to the latest report released by the National Pension Commission (PenCom), contributions climbed to N39.86bn, benefiting 8,408 Retirement Savings Account (RSA) holders within the period.
This performance marks a significant jump compared to Q1 2024, when just N10.52bn was disbursed to 1,390 RSA holders.
The growth trend also continued steadily through 2024, with N18bn released in Q2 to 2,491 beneficiaries, N32.62bn in Q3 to 3,925 RSA holders, and N30.24bn in Q4 to 7,094 individuals.
The Q1 2025 figure represents the highest on record, both in the value of disbursements and in the number of participants accessing the scheme.
On a quarter-on-quarter basis, this reflects a 32 per cent increase in disbursed funds and an 18 per cent rise in beneficiaries compared to Q4 2024.
A sectoral breakdown shows that public sector workers dominated participation, with 5,945 applications (70.7 per cent) approved.
Meanwhile, 2,463 applications (29.3 per cent) came from private sector workers, underscoring a growing acceptance of the scheme across diverse industries.
The mortgage equity contribution initiative, introduced under Section 89(2) of the Pension Reform Act 2014, allows active RSA holders with at least 60 months of consistent contributions to access part of their pension savings as equity towards purchasing their first home.
The goal is to ease Nigeria’s housing deficit while enabling contributors to convert retirement savings into immediate value for long-term security.
According to the Pension Fund Operators Association of Nigeria (PenOp), three major factors have fueled the sharp rise:
Increased Awareness: More Nigerians are now aware that their pension funds can serve as an avenue for homeownership, not just retirement.
Improved Access: Pension Fund Administrators (PFAs) have streamlined the process of applying for equity contributions, reducing bureaucratic hurdles.
Rising Housing Demand: With urban rents climbing and housing shortages persisting, many Nigerians see pension-backed mortgages as the most viable path to owning a home.
“From N10.52bn in Q1 2024 to N39.86bn in Q1 2025, we’ve seen a 279 per cent jump in value, while the number of beneficiaries surged 505 per cent.
This demonstrates not only increased awareness but also greater trust in the CPS as a tool for financial empowerment,” PenOp stated.
Nigeria currently faces an estimated housing deficit of over 20 million units, a challenge that has kept homeownership rates low despite population growth.
Analysts believe pension-backed equity contributions could become a game-changer if effectively scaled.
By leveraging pension savings, contributors can make the initial down payment for mortgages, while banks provide financing for the balance.
This reduces the barrier of high upfront costs that often discourage aspiring homeowners.
However, stakeholders have warned that broader housing finance policies must complement the initiative.
Rising building costs, limited access to long-term credit, and high interest rates continue to weigh down Nigeria’s housing sector.
Meanwhile, PenCom has taken steps to maintain transparency and compliance in the scheme.
In a recent circular dated August 11, 2025, the commission blacklisted seven primary mortgage banks over alleged violations of its housing loan guidelines.
The affected institutions include:
Jigawa Savings & Loans Limited
FHA Mortgage Bank Limited
Delta Trust Mortgage Bank Limited
AG Mortgage Bank Limited
Infinity Trust Mortgage Bank Plc
First Trust Mortgage Bank Limited
Mutual Alliance Mortgage Bank Limited
PenCom directed PFAs and Pension Fund Custodians (PFCs) to stop processing applications linked to the blacklisted institutions, reinforcing its commitment to safeguarding contributors’ funds.
With the momentum recorded in Q1, analysts expect pension-backed mortgages to play an even bigger role in Nigeria’s housing market.
However, they warn that sustained growth will require:
Strong collaboration between PFAs, mortgage banks, and developers
Policy reforms to make housing loans more affordable
Enhanced consumer education to expand participation among private sector workers
If these issues are addressed, experts say Nigeria could gradually close its housing gap while strengthening pension fund utility.
For now, the record-breaking N39.86bn disbursed in Q1 2025 reflects both the pent-up demand for homeownership and the growing trust in the Contributory Pension Scheme as a driver of social and economic stability.
