The Problem

Fewer South Africans will b# e able to retire comfortably. The two-pot system gives quick relief, but it doesn’t fix the long-term money gap that many face when they stop working.

Why the Current Fixes Fall Short

– The focus is on getting money now, not growing retirement savings for later.

– Withdrawals are often used for bills, debt, or school fees, leaving less to grow for retirement.

– Many people will retire with far less income than they need because their savings aren’t growing.

Sanlam’s Snapshot: What the Numbers Show

– Emergency-pot payouts: ~R4 billion across 223,000 claims (Sept 2024–Aug 2025).

– Tax paid to SARS: ~R1 billion.

– Average monthly withdrawals: ~R150 million; spike to just under R400 million when the new tax year began.

– Repeat claimants: ~70% of March withdrawals were from people who had withdrawn before.

– Full-allocation withdrawals: ~81% of members who take withdrawals, averaging about R22,100 per withdrawal.

– Participation: ~27% of Sanlam’s total members have made withdrawals.

– Demographics: 42% of withdrawals by ages 35–44, 28% by 45–54, 22% by 25–34.

– Primary uses: debt repayment (44%), school fees (33%), supporting unemployed family members; living costs (rent, food, medical) also significant.

– Replacement risk: ~80% of withdrawals come from members with net replacement ratios below 50%.

What a Stronger, Longer-Term Solution Could Look Like

– Higher, smarter savings from the start: default contribution rates that rise over time.

– Straightforward, practical money coaching on saving, debt, and retirement planning.

– A richer benefits package that supports health and protection, not just savings.

– Policies and employer programs that help preserve retirement funds rather than depleting them.

The Take-Home Message

– Short-term relief helps, but it’s not enough to close the retirement gap.

– A clear, practical plan that combines better saving, accessible guidance, and integrated benefits could improve long-term retirement outcomes for more people.