{"id":817751,"date":"2025-03-20T09:49:05","date_gmt":"2025-03-20T07:49:05","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817751"},"modified":"2025-03-20T09:49:10","modified_gmt":"2025-03-20T07:49:10","slug":"r4-5-billion-two-pot-retirement-surge-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/817751\/r4-5-billion-two-pot-retirement-surge-in-south-africa\/","title":{"rendered":"R4.5 billion two-pot retirement surge in South Africa"},"content":{"rendered":"\n

Listed insurance and financial services group Momentum says it has processed over 260,000 wo-pot retirement withdrawal applications, totalling R4.5 billion.<\/p>\n\n\n\n

Reporting its interim results for the six months through December 2024, the group recorded an excellent performance, with headline earnings surging 55%.<\/p>\n\n\n\n

The group’s headline earnings per share improved by 55% from 157.4 cents to 243.6 cents, and earnings per share increased by 55% from 157.4 cents to 244.3 cents.<\/p>\n\n\n\n

Operating profit increased by 33% from R2.13 billion to R2.84 billion, while return on equity improved to 24.6% from 17.4% the prior year.<\/p>\n\n\n\n

Net insurance and investment results rose to R9.06 billion, up 32.36%.<\/p>\n\n\n\n

Momentum\u2019s operating profit rose by 33% to R2.84 billion, while its total comprehensive income for the period grew to R3.47 billion.<\/p>\n\n\n\n

The company\u2019s investment return more than doubled to R595 million.<\/p>\n\n\n\n

The strong performance was driven by a combination of internal operation improvements and positive market conditions for the group.<\/p>\n\n\n\n

This includes the group’s diversified portfolio of businesses and management interventions to introduce new businesses.<\/p>\n\n\n\n

It also saw positive contributions from a significantly improved underwriting result in its insurance businesses, profit released from annuities in the investment business and improved profitability in corporate. <\/p>\n\n\n\n

The cherry on the top for Momentum came through a favourable external investment and underwriting environment.<\/p>\n\n\n\n

The group did record operating costs that were higher than inflation, however it said that these mostly related to spending on IT infrastructure to support the two-pot retirement withdrawals.<\/p>\n\n\n\n

It processed over 260,000 two-pot claims, totalling R4.5 billion.<\/p>\n\n\n\n

In addition to added IT costs to process the flood of claims, the group also noted the withdrawals’ impact on sales.<\/p>\n\n\n\n

It said that life annuity sales were likely hit by the backlog in retirement claims processing created by the surge in claims.<\/p>\n\n\n\n

Another two-pot retirement flood incoming<\/h2>\n\n\n\n
\"\"<\/a>
Momentum Metropolitan Sandton<\/figcaption><\/figure>\n\n\n\n

Momentum noted that Metropolitan Life\u2019s value of new business premiums increased by 2% to R3.3 billion, largely attributable to an increase in long-term savings new business volumes.<\/p>\n\n\n\n

The introduction of the two-pot retirement system and the launch of new products to meet this requirement aided in these new business volumes. <\/p>\n\n\n\n

However, this was partially offset by lower protection and life annuity new business volumes.<\/p>\n\n\n\n

“Metropolitan Life saw a shift away from life annuity products due to lower interest rates. We believe sales were further impacted by the backlog in retirement claims processing created by two-pot withdrawal claims,” it said.<\/p>\n\n\n\n

According to other insurers, two-pot withdrawals far exceeded initial expectations and are set to continue to do so in 2025.<\/p>\n\n\n\n

Alexforbes noted earlier in March that there has already been a survey of new withdrawals in the new tax year, having received over 68,000 savings pot withdrawal claims over just 14 days.<\/p>\n\n\n\n

“Our research shows that individuals who claimed in the previous tax year had a high likelihood of claiming again in the new tax year,” it said.<\/p>\n\n\n\n

The withdrawals have been a particular boon for the South African Revenue Service (SARS).<\/p>\n\n\n\n

SARS initially projected only R5 billion in revenue from the system but has already collected R11.6 billion.<\/p>\n\n\n\n

Financial advisors have urged South African to avoid withdrawing from their retirement funds if they can, as it results in extra taxes being paid and compromises long-term retirement plans.<\/p>\n","protected":false},"excerpt":{"rendered":"

Momentum Group has reported a strong set of results for the six months ending December 2024, including a surge in two-pot retirement withdrawals totalling R4.5 billion.<\/p>\n","protected":false},"author":10,"featured_media":641707,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[6652,22092],"class_list":["post-817751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-momentum","tag-two-pot-retirement"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817751"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817751\/revisions"}],"predecessor-version":[{"id":817757,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817751\/revisions\/817757"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/641707"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}