South Africans access retirement savings early

ONLY two months into the new tax year, many South Africans have again dipped into their retirement fund Savings Pot, after also making a withdrawal in the previous six months.

- JOHN-PAUL FRASER and SHUANITA DE WET

Retirement fund administrators represented on the Retirement Matters Committee of the Actuarial Society of South Africa (ASSA) reported that around 75% of applications already received in March and April 2025 were repeat claims, ASSA said in a media release.

This follows after more than 2.69 million South Africans accessed a part of their retirement savings under the Two Pot Retirement System in the tax year ending February 2025. Experts say this is a clear indication that many are eager to lay their hands on extra cash, and as soon as they can.

According to the South African Revenue Service (Sars), a gross lump sum of R47 billion was paid to retirement fund members from their Savings Pot in the six months following the implementation of the Two Pot System on 1 September 2024. This yielded nearly R12 billion in tax revenue, which is almost double the R5 billion initially projected by the National Treasury.

Under the new system, pension fund members are allowed one withdrawal from the Savings Component in a tax year.

South African expatriates residing abroad are most certainly among those who withdrew money from their Savings Component, which was seeded with up to 10% of their pension fund credit as of 31 August 2024, capped at R30,000. This once-off transfer came from the funds accumulated in the vested pot up to that point.

Encashing on your policies after Ceasing Tax Residency

Before March 1, 2021, individuals could withdraw retirement interests immediately after formalising their emigration with both Sars and the South African Reserve Bank (SARB). This included Pension, Preservation, Provident Preservation, and Retirement Annuity Funds.