Cost of financial illiteracy

SURVEY: RETIREMENT SYSTEM IS UNDER PRESSURE FROM LACK OF UNDERSTANDING, SAYS EXPERT

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South Africans' poor financial literacy is costing the country and consumers millions, especially where preparing for retirement is concerned, with nearly half of the respondents in a recent survey saying they need more financial education.

According to the 2025 Sanlam Benchmark Survey, the 44^th edition of some of the country's most comprehensive retirement fund industry research, the respondents called for school-level financial education.

If you ever said you learned nothing useful at school, you are probably right: financial education at school level would have made a huge difference in the lives of many consumers and have lessened the pressure on South Africa's retirement system.

Kanyisa Mkhize, chief executive at Sanlam Corporate, says the country's retirement system is under pressure, not only from economic strain but from a widespread lack of access, understanding and early intervention.

According to the 2025 Sanlam Benchmark Survey, financial literacy gaps could quietly cost the country millions in lost savings, missed opportunities and poor long-term outcomes.

Mkhize says as South Africa's population ages and the pressures of modern work life intensify, the research underscores the urgent need for a holistic approach to employee health and retirement well-being.

"The findings reveal that tackling financial as well as mental stress is critical to ensure long-term health and economic security for South Africans," says Mkhize.

"The 2025 research spanned interviews with over 70 stand-alone funds, 168 participating employers in umbrella funds and over 500 consumers."

The key findings show that:

Only 42% of retirement fund members believe they are on track to save enough for retirement.

43% think they will maintain their current standard of living in retirement.

However, six in 10 funds say members will not be able to retire comfortably by the age of 64.