Thousands of South Africans rushed to access their retirement savings during the first week of the new tax year, according to financial services provider Alexander Forbes.
The surge in withdrawals comes despite repeated warnings from financial experts that frequent access to retirement savings could reduce long term retirement income and weaken the benefits intended under South Africa’s two pot retirement system.
Introduced in September 2024 through the Revenue Laws Amendment Bill, the two pot system allows retirement fund members to access a portion of their savings without withdrawing their entire pension. The system was designed to provide financial relief during emergencies while preserving the majority of members’ retirement funds.
Alexander Forbes said more than 140 000 withdrawal claims were submitted during the first week of March, with about 84 000 already processed and paid.
The company noted that the first claim was submitted just after midnight on 1 March, highlighting the immediate demand among members seeking access to their savings.
Most of the withdrawal activity was processed through the company’s digital platform, AF Connect, which recorded more than 1.3 million logins during the same period.
Vickie Lange, Head of Solutions Enhancement at Alexander Forbes, said the early surge in claims shows that many fund members require quick access to their savings.
The company said it has increased its operational capacity to manage the high volume of claims and continues to monitor processing times to ensure accuracy and compliance.
Members were also reminded that withdrawals from the savings pot are subject to tax and will reduce the value of their retirement savings.
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