As South Africans navigate the complexities of the newly implemented two-pot retirement savings system, a concerning trend has emerged.
Recent data indicates that many members of retirement funds are making repeat withdrawals, depleting their savings components at an alarming rate. This pattern raises questions about the long-term viability of their retirement plans.
In the first two months of the new tax year, March and April 2025, retirement fund administrators reported that approximately 75 of withdrawal applications were repeat claims.
A consulting actuary and member of the Actuarial Society of South Africa ASSA Retirement Matters Committee, Natasha Huggett-Henchie highlighted that the average withdrawal during the initial round was R20,000, while subsequent applications saw a significant drop to R6,000.
The two-pot system, which became effective on 1 September 2024, was designed to protect retirement savings by allowing members to access only a third of their benefits through a savings component while preserving the remaining two-thirds for retirement.