Indonesia demographic aging and social protection

Indonesia is navigating significant socio-economic challenges related to poverty and a looming demographic transition toward an aging population. As of March 2026, the poverty rate was reported at 8.07 percent, affecting approximately 22.93 million people.

To address these shifts, the Indonesian government has identified old-age social protection for informal workers as a primary priority. This is particularly urgent given that approximately 60 percent of the nation’s 155 million workers operate in the informal sector. Current data indicates a lack of preparedness for an aging society, with only 5.37 percent of the population owning a pension fund and a pension fund literacy index of 22 percent.

Research suggests that while the elderly population reached 12 percent in 2025, it is projected to exceed 20 percent by 2045. Currently, 82.96 percent of the elderly are financially dependent on working family members, and 55.32 percent of seniors remain in the workforce, mostly in the informal sector. In response, officials are emphasizing cross-sector collaboration, data integration, and initiatives like the Financial Services Authority’s 2026 Pension Fund Month to expand social protection coverage.