Discover how South Africans are navigating their savings with insights from Alexforbes' latest survey, revealing trends in withdrawal usage and member satisfaction. File photo.
Alexforbes has unveiled pivotal insights from the implementation of the two-pot retirement system, a transformative change in South Africa’s retirement fund sector introduced on 1 September 2024. The system is designed to balance long-term savings with immediate financial needs, ultimately enhancing the financial well-being of retirement fund members.
Based on a comprehensive survey of over 8,200 responses and data analysis covering more than one million members, Alexforbes highlighted significant findings.
Transformative impact
The survey says the two-pot system allows members to access a portion of their savings for financial needs while preserving the rest for retirement. Projections indicate that retirement outcomes could improve by 2 to 2.5 times for new members under this system.
Claims analysis
Key trends have emerged from the data:
Claims Volume: By November 30, 2024, over 348,000 claims amounting to more than R6.5 billion were submitted, with 65% filed in September 2024. Over 97% of claims were processed by 30 November, with an average processing time of eight working days. By January 30, 2025, claims exceeded 370,000, totalling over R7 billion. This high volume underscores members' immediate financial needs and the importance of effective digital platforms and administrative capabilities, the survey says.
Age Distribution: 76% of claims were from members aged 31-51, indicating significant financial responsibilities in this age group.
Financial Vulnerability: 59% of claims were from members with fund credits under R250,000, and 94% from those earning below R550,000, showing financial needs often outweigh the benefits of preserving retirement savings.
According to the insights, claims were observed across various sectors, with the following distribution:
These trends reveal differing financial behaviours and needs across industries.
Survey findings
Balanced Utilisation: 54% of respondents accessed their savings pot, while 46% did not, indicating informed decision-making and growing trust in the two-pot system.
Satisfaction: 86% of claimants were satisfied with their decision, suggesting the system meets most members' expectations. Feedback indicates a generally positive experience with the claiming process, and Alexforbes remains committed to further improving member experience.
Understanding and Awareness: 96% of respondents understood the long-term impact of withdrawals and tax implications. Engagement before implementation helped build trust between members and their retirement funds.
Future Claims: 47% of members plan to claim in the future, with 34% of previous claimants intending to claim again. Among those who did not make an initial claim, 33% do not plan to claim, while 13% are considering it.
Usage of Savings: 80% of claimants used their withdrawals for debt repayment and essential living expenses. Of these, 50% repaid debt, and 30% covered essential costs. Other uses included major purchases (13%), financial investments, home improvements, medical bills, education, and vehicle maintenance (7%). These findings suggest members prioritise financial stability when accessing their savings. Debt solutions and rewards programmes could provide additional value, helping members better manage finances while preserving long-term savings.
Workplace resources and trusted advice
The survey shows that 59% of members accessed information through their workplace and 50% consulted professional advisory services, highlighting trust in employer-sponsored resources.
“A smaller proportion (32%) turned to media and social media, while 13% relied on family and friends. These insights underscore the importance of effective communication and support from retirement funds and service providers,” the survey reveals.
Looking ahead
The group says the two-pot system has become a vital financial resource, enabling members to manage financial challenges while preserving most of their retirement savings.
PERSONAL FINANCE