Not all South Africans are raiding their savings

When South Africa’s two-pot retirement system was introduced in September 2024, much of the discussion focused on what people might do with access to a portion of their retirement savings.

Would withdrawals become commonplace? Would preservation rates decline? Would easier access undermine long-term retirement outcomes?

These were reasonable questions. After all, millions of South Africans face genuine financial pressures, and the ability to access savings in times of need was one of the key motivations behind the policy.

Now, with data spanning three tax years, we have the benefit of evidence rather than speculation. What we have seen at EasyRetire has been both encouraging and, in some respects, surprising.

So far in the 2027 tax year, 81.4% of our members have chosen not to withdraw from their savings pot. That’s significantly higher than the national benchmark of approximately 64%, according to the Sanlam Benchmark Survey 2025. Even more interestingly, the average withdrawal per member has declined steadily over the period under review.

What makes these numbers particularly noteworthy is that EasyRetire does not charge administration fees on two-pot withdrawals, nor have we deliberately introduced barriers to access. Our view has always been that members should be able to access their own money when they genuinely need it.

The assumption often made in financial services is that making something easier to do will naturally lead more people to do it. However, our experience suggests that the relationship may be more complex.

Over the years, one of the lessons we have learnt through EasyEquities is that transparency matters. When people can clearly see their investments, understand the implications of their decisions and engage directly with their financial future, they tend to make better choices.

When life happens

The same principle appears to be emerging in the retirement environment. Members who can see their savings balance, understand the tax implications of a withdrawal, and appreciate the long-term impact on their retirement outcomes, seem more likely to pause and consider their options carefully.

Consider a simple example. A R20,000 withdrawal at age 40 could reduce retirement capital at age 65 by more than R216,000, assuming 10% annual growth. At higher growth rates, that figure becomes even more significant. For many people, seeing the future value of that decision changes the conversation entirely.

This is not about discouraging withdrawals. The two-pot system exists because life happens. Unexpected expenses arise. Financial emergencies occur. Access to savings can provide much-needed relief when it matters most.

Rather, it is about ensuring that members have the information they need to make informed decisions.

How to drive better behaviour

The data also highlights where further work can be done. A relatively small group of members accounts for a disproportionately large share of withdrawals. Understanding their circumstances and engaging with them more effectively may help improve outcomes over time.

Importantly, these interventions do not need to rely on additional complexity or administrative hurdles. Sometimes a timely reminder, a personalised projection or a clearer explanation of the long-term impact can make a meaningful difference.

For me, the broader lesson is that trust and transparency are often underestimated as tools for driving better financial behaviour. People are capable of making good decisions when they have good information. Our role as an industry is not to make decisions for them, but to equip them with the knowledge and context they need to make those decisions themselves.

As we navigate the third tax year of the two-pot system, that may be the most valuable insight the data has provided.

Charles Savage is the CEO of Purple Group, owner of investment platform EasyEquities.

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