Close to 90% of two-pot claimants report being financially constrained, with 45% indicating that the pressure is significant.   

We’re in a cost-of-living crisis, and while that strain shows up differently across generations, it’s affecting everyone. For most South Africans, their retirement fund is all the savings they have for their later years. And yet, when we look at where members are versus where they should be, it’s hugely concerning. Only about 6% are anywhere near target, based on how much they should have saved relative to their salary.  

When we examine recent Two-Pot behaviours, it brings that financial pressure people are feeling to life. Access to savings went live at midnight on 1 March; by 8 am, Old Mutual Corporate already had over 3 000 claims. By the end of March, there was over 100 000 claims. Since Two-Pot’s inception, we’ve now paid out over R6 billion across more than 500 000 claims. Just 21% of people are classified as preservers – aka, they have left their savings “pot” untouched. 41% are contingency withdrawers – they’ve claimed once – and 38% are serial claimers, they keep dipping back in. This year, over 75% of members chose to “withdraw all”, with the average claim amount being R11 000. This is across all ages and income groups. 46% said they’d claim again.  

Are people being reckless? We don’t think so. In our survey of almost 37 000 members, we asked for the primary drivers of withdrawals. Most people (32%) said basic living needs (food, water, housing, transport), and debt repayments (26%), followed by emergencies (25%).  In other words, these are not choices of indulgence, but decisions of necessity, driven by the need to meet essential living costs in a context of real financial strain. 

However, there is some good news. We are seeing some real green shoots of progress. Engagement has increased dramatically – members are interacting with their funds, updating their details, and starting to take ownership. It’s no longer “my employer’s fund”, it’s “my fund”. Digitisation, particularly through WhatsApp, has played a huge role in this, with significantly higher read rates, usage and engagement from members.  

We’re also seeing meaningful improvements in preservation rates. Historically, about 60% of money paid out of funds pre-retirement was taken in cash. In the last year alone, that number has dropped to 48%. That’s a 13% shift in the overall amount of money staying invested and being preserved. 

And some members are even choosing to preserve more than just their retirement pot. People are being told they must leave some money behind, but many are actually choosing to leave more – in some cases, even preserving everything. More members are also annuitising at retirement – in other words, turning their savings into a retirement income – which is exactly what we want.  

What this tells us is that education is a process. It’s about engaging members at the right time, with the right information, in a way that’s relevant to where they are in their journey.  

So, the focus now is clear. We need to meet members where they are, acknowledge the financial pressure they’re under, and support them with practical tools and guidance at every stage of their journey. Advisers play a pivotal part in this journey. If we can keep building engagement, improving understanding, and reinforcing better behaviours over time, then these green shoots can turn into real, sustained improvements in retirement outcomes. 

To find out more, listen to the full presentation from the EB Forum webinar.