South African households are facing growing financial pressure, with an increasing number of consumers turning to their retirement savings to make ends meet.
Early indications show a sharp rise in withdrawals from the country’s two-pot retirement system at the start of the new tax year in March, raising concerns among financial experts.
Financial journalist Maya Fisher-French has cautioned against the growing trend, warning that many South Africans may be undermining their long-term financial security.
Fisher-French noted a troubling pattern emerging from the data, with approximately 60% of individuals accessing their savings component doing so repeatedly. This, she said, raises concerns about whether withdrawals are being used for genuine emergencies or increasingly to support everyday expenses.
She also warned that the timing of recent withdrawals may have further disadvantaged savers.
Many applications were submitted in early March, coinciding with a downturn in global markets. Fisher-French pointed to geopolitical tensions, including attacks involving Iran, which contributed to a spike in oil prices and volatility in financial markets.
During that period, the Johannesburg Stock Exchange fell by around 10%, meaning retirement funds which are typically invested in equities, would have been negatively affected.
“This made it a particularly bad time to withdraw from your savings pot,” she explained, adding that market losses could significantly reduce the value of withdrawals.
Fisher-French stressed that accessing retirement savings should remain a last resort.
“Generally, it’s not a good idea unless it’s a real emergency,” she said.
The trend highlights the financial strain many households continue to face, while raising concerns about the long-term implications for retirement security in South Africa.