Annuity withdrawals hit low

This figure is down from 6.6% the previous year.

- Liesl Peyper

Living annuity investors in South Africa reduced their income withdrawals to the lowest average level on record in 2024.

According to data from the Association for Savings and Investment South Africa (Asisa), policyholders drew an average of 5.6% of their invested capital as income in 2024, down from 6.6% the previous year. It is the lowest average since Asisa began compiling living annuity statistics in 2011.

Since 2010, Asisa has encouraged its member companies to submit annual living annuity statistics, with the first set of data collected in 2012 for the 2011 reporting period.

Jaco van Tonder, deputy chair of the Asisa Marketing and Distribution Board Committee, told Moneyweb about half of the drop in drawdowns is due to market performance over the past year.

"If you do the maths and add the returns of the JSE All Share Index [Alsi] to the asset pool – and assume the previous drawdown rate was, say, 6.5% – the increase in assets reduces the effective [drawdown] rate."

Asisa's statistics show that the living annuity asset pool grew to R781.7 billion by the end of December, compared to R682.2 billion in the corresponding period in 2023.

The number of living annuities increased from 535 509 at the end of 2023 to 554 043 as at 31 December 2024.