South Africans turning to ‘Two-Pot’ system: A deep dive into retirement savings trends
This milestone provides a valuable lens into evolving member behaviour and financial decision-making. Amid persistent economic pressures, many retirees and contributors are increasingly accessing their savings early, seeking short-term relief while trying to protect long-term security.
The recurring nature of withdrawals highlights the tension between immediate liquidity needs and future retirement wealth. It underscores the importance of digital efficiency, proactive fund management, and retirement benefit counselling to help South Africans navigate this evolving retirement landscape responsibly.
Analysing the data: Frequency and intent
A deeper analysis of the data from the first week of March 2026 suggests a distinct pattern in member behaviour. Rather than a broad-based surge across the entire membership, we are seeing a concentrated trend among those who have previously accessed the system.
Of the claims submitted since 1 March 2026, 5% are first-time claimants, 33% are making their second withdrawal, and 62% are now on their third withdrawal. The data shows that those who have accessed the system once are increasingly likely to do so annually.
Furthermore, among those who choose to claim, the vast majority are requesting 100% of their available savings pot. This suggests that the system is being utilised to its maximum capacity by a specific segment of the membership to manage ongoing financial requirements.
The impact on fund assets
Despite the frequency of repeat claims, it’s important to note the impact on the broader retirement ecosystem. While a cumulative 33.7% of the FundsAtWork umbrella fund membership has submitted a savings claim since inception, the actual impact on total fund assets remains contained at 1.97%.
In the first eleven days of March 2026 alone, 38,148 claims were received, representing 8.6% of the membership. While the average claim value has fluctuated - from R12,666 in September 2024 to R9,290 in March 2026 - the high volume of sub-R10,000 claims (71% of the total) implies that these funds are primarily used for modest, short-term liquidity needs.
Credit stress and the widening gap
The Momentum BMR report shows that nearly half of South African households would struggle to cover an unexpected expense without borrowing or accessing savings. Insights from Eighty20’s 2025 Q4 Credit Stress Report provide context for these withdrawal patterns. Over-indebtedness remains a significant challenge, with 40% of credit-active South Africans in default (three or more months in arrears) on one or more loans.
The report notes a R12bn increase in overdue balances in the final quarter of 2025. While the Two-Pot system has assisted many in managing these pressures, the rapid growth in debt, particularly in home loans and vehicle finance, highlights a widening gap for many households.
Notably, credit stress is no longer confined to lower-income brackets; "comfortable retirees" and high-income households are also showing increased default rates, suggesting that financial pressure is permeating all tiers of the economy.
Digital efficiency and proactive risk management
One of the biggest successes of the Two-Pot reform has been the seamless integration of technology. Digital adoption is nearing 100%, with 98% of claims in the first week of March 2026 submitted via digital channels and processed through straight-through processing. This efficiency allowed 88.6% of valid claims to be paid within the first week of the month.
The long-term cost of short-term relief
However, the industry remains focused on the cumulative effect of repeated maximum withdrawals. The primary consideration is the loss of compound growth, the engine of retirement wealth.
Every R10,000 withdrawn today represents a significant reduction in future purchasing power. For younger members, in particular, it represents several times that amount in lost purchasing power at retirement.
This is where retirement benefit counselling becomes essential, providing the necessary guidance to ensure members understand the long-term implications of their choices. When withdrawals are considered within the context of a broader financial plan and professional guidance, we can work toward ensuring that the convenience of the savings pot does not compromise a dignified and secure retirement.