Understanding the implications of South Africa's R3.6bn pension and R57bn withdrawals

SOUTH Africa's pension system has absorbed two shocks that speak to the pressures shaping household financial life today. The first is the reported R3.6 billion impairment reported by the Government Employees Pension Fund (GEPF) for 2024/25 after delays in the recovery of unlisted investments.

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The second is the R57 billion that members withdrew in the first ten months of the two-pot system, a release that was meant to be gradual but quickly became a measure of how stretched families really are.

These numbers reveal more than financial strain. They expose a system built on expectations that no longer match the realities of how people work, earn and save.

For many South Africans, the path into stable work is not linear. People enter the formal labour market late, often around their late twenties or early thirties. They move between short-term contracts, gig work and periodsof interruption that weaken contribution histories. They support extended families out of the same income that is meant to fund retirement, navigate uneven earnings and face rising costs that consume a growing share of disposable pay. By the time stability arrives, the runway to retirement is shorter and the pressure to make upsavings is high.

The R57 billion withdrawn under the two-pot system is therefore not surprising. It reflects a deep sense of immediacy in households where pensions serve as both long-term security and short-term relief. Older members carry a different risk.

Many rely on digital systems that they were never prepared for and are exposed to increasingly sophisticated fraud. Pension communication is often written in technical language that obscures rather than clarifies. The result is a system where young and old members face different challenges yet share the same anxiety: uncertainty about what their retirement will look like and how much control they truly have.This is the landscape into which artificial intelligence is emerging.