Growing numbers of South Africans are tapping into retirement savings under the two-pot system.
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Financial advisors are growing concerned about the extent to which South Africans are withdrawing money from their pension funds following the “two-pot” retirement system that was introduced in September 2024.
Within months of the new rules being introduced, the South African Revenue Service (SARS) had recorded over two million applications, with over R35 billion being processed.
That momentum continued through 2025, with a further R18 billion withdrawn that year, while an alarming new trend has emerged in 2026, with data showing that only five percent of claimants were first-time users of the two-pot system.
While most withdrawals are small, with amounts typically below R10,000, the data does clearly show that two-pot withdrawals are becoming habitual. While the overall impact on total retirement assets is still relatively contained, at under 2% in some funds, the behavioural shift is becoming a cause for concern.
Thys van Zyl, CEO of Everest Advisory Services, says the data shows South Africans are increasingly using their retirement savings to address recurring financial pressures rather than once-off emergencies, and many are opting to withdraw the full available amount each time.
“When individuals begin using their savings pot on a regular basis, it shifts from being an emergency measure to a financial coping mechanism. That is where the real risk lies.”
Van Zyl warned that this behaviour has serious long-term consequences.
“Every withdrawal reduces the potential for compound growth, which is one of the key drivers of overall retirement savings growth. What may seem like a relatively small withdrawal today can translate into a substantial shortfall at retirement over time.”
He said that while the system has improved access to funds and reduced the need for individuals to resign in order to access their retirement savings, it has also introduced new behavioural risks.
“The ease of access means that withdrawals have become quicker and simpler, which can also encourage more frequent use.”
He added that financial pressure was no longer limited to lower-income households, with signs of strain now being seen across the spectrum.
“The reality is that retirement savings should not become a source of cash flow. If used incorrectly or too frequently, it can significantly undermine long-term financial security.”
Old Mutual financial planner Sean van Zyl concurs, stating that the real risk is not the withdrawal itself, but the interruption of compounding at the most critical stage.
“It is here that the lasting damage is done,” he said.
“The two-pot system was designed to provide limited financial relief in times of genuine financial stress. However, a growing behavioural trend has emerged, presenting a serious risk to long-term financial security.”
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