South Africa’s two-pot retirement system is seeing increased withdrawals as middle-income households use their savings to pay debt, cover living expenses and education costs
South Africa’s two-pot retirement system is increasingly being used by middle-class households to cope with rising living costs and debt, with many members making repeat withdrawals from their retirement savings.
According to new data from Momentum Corporate, 52% of members who are eligible to withdraw from their savings component have already done so.
The survey found that established middle-income households are among the most likely to make repeat withdrawals, while many lower-income members cannot access the money because their savings fall below the R2,000 minimum withdrawal threshold.
The data shows that 44% of withdrawals were used to pay off debt, while 23% went towards everyday living expenses and 20% towards education.
