When South Africa’s two-pot retirement system was introduced in September 2024, many industry commentators questioned how members would respond to having easier access to a portion of their retirement savings.
Would large scale withdrawals undermine long-term retirement outcomes? Would members treat the savings pot as a source of discretionary spending? Or would access to emergency savings reduce the need for individuals to resign from employment simply to access retirement money?
Now, nearly two years later, we are starting to see clear behavioural patterns emerge. The two-pot system was designed to balance two important objectives. One-third of new retirement contributions flow into a savings pot that can be accessed once per tax year, while two-thirds are preserved for retirement. Members can make a withdrawal from their savings pot from the start of each new tax year on 1 March, provided sufficient savings have accumulated since any previous withdrawal.
Our latest analysis suggests that the system is succeeding in creating this balance between accessibility and preservation. Perhaps the most significant finding is that most members are choosing not to withdraw.
Around 55% of eligible members have never accessed their savings pots, despite having had three opportunities to do so since implementation. This suggests that concerns about widespread erosion of retirement savings may have been overstated.
At the same time, a smaller group of approximately 27% of members have become repeat withdrawers, accessing their savings in more than one tax year. This tells us an important story about the diversity of financial circumstances among South African workers. For many members, the savings pot serves primarily as a safety net. For others, it has become an important source of short-term financial relief.
What is particularly encouraging is that preservation appears to be gaining momentum over time.
Growth in withdrawal participation versus share of savings withdrawn (2025 to 2026 tax years)
While the proportion of eligible members making withdrawals increased slightly between the 2025 and 2026 tax years, the proportion of total available savings withdrawn declined substantially. In other words, although marginally more members are accessing their savings, the overall value being withdrawn is falling relative to the amount being accumulated.
This suggests that members who preserve their savings are gradually building meaningful financial buffers, while repeat withdrawers tend to have lower balances available over time because withdrawals slow the accumulation process.
The data also highlights several interesting behavioural trends. Withdrawal activity is heavily concentrated during the working week, with significantly lower activity on weekends and noticeable increases on Mondays. This indicates that withdrawal decisions are often linked to workplace routines, financial administration and budgeting cycles.
Another notable trend is the strong concentration of repeat withdrawals immediately after the start of a new tax year. Among members withdrawing in the first few days after 1 March, the overwhelming majority had previously made withdrawals. This suggests that many repeat withdrawers actively anticipate the annual opportunity to access their savings. By contrast, first-time withdrawals occur relatively consistently throughout the year. This pattern may indicate that many members are accessing savings in response to genuine financial events rather than strategically timing withdrawals around the tax calendar. Income continues to be one of the strongest predictors of withdrawal behaviour.
Lower-income members are significantly more likely to withdraw than higher-income members, which is unsurprising given the financial pressures many households continue to face. However, one of the more interesting developments is that withdrawal activity has increased across most income categories, including among higher earners.
This serves as a reminder that financial strain is not confined to lower-income households. Rising living costs, high debt levels and economic uncertainty continue to affect a broad spectrum of South Africans.
Perhaps the most important lesson from the first two years of the two-pot system is that access alone does not automatically result in excessive withdrawals.
The data points to a significant number of members exercising restraint and prioritising long-term savings, even when they have the ability to access funds. At the same time, it demonstrates the value of having emergency savings available for members facing financial pressure.
The challenge for the retirement industry now is to build on this foundation. While the two-pot system has undoubtedly improved retirement preservation outcomes compared with the previous framework, meaningful retirement security will ultimately depend on helping members strengthen their financial resilience and make informed decisions about when, and when not, to access their savings.
South Africa’s two-pot system was designed as a balance between today’s needs and tomorrow’s security. Two years on, the evidence suggests many members are beginning to strike exactly that balance.
