{"id":854409,"date":"2026-03-20T07:00:00","date_gmt":"2026-03-20T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=854409"},"modified":"2026-04-02T09:57:59","modified_gmt":"2026-04-02T07:57:59","slug":"government-considering-emergency-access-to-pension-funds","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/854409\/government-considering-emergency-access-to-pension-funds\/","title":{"rendered":"Government considering ’emergency’ access to pension funds"},"content":{"rendered":"\n

The National Treasury is considering allowing limited access to funds that are currently strictly preserved until retirement under \u201cvery strict\u201d conditions.<\/p>\n\n\n\n

This was the feedback from Chris Axelson, deputy director-general for tax and financial sector policy at the Treasury. <\/p>\n\n\n\n

Axelson told a joint sitting of Parliament\u2019s Standing Committee on Finance and Select Committee on Finance that discussions around potential reforms are expected to begin later this year.<\/p>\n\n\n\n

\u201cThere were some requests for refinement for the two-pot regime. We do aim to initiate discussions later this year to talk about potential access to the retirement pot, but only under very strict financial distress conditions,\u201d he said.<\/p>\n\n\n\n

South Africa\u2019s two-pot retirement system, introduced in September 2024, was designed to allow limited access to savings while preserving the bulk of retirement funds.<\/p>\n\n\n\n

Under the system, one-third of retirement contributions is allocated to a savings pot, which members can access once a year, while the remaining two-thirds is placed in a retirement pot that is preserved until retirement.<\/p>\n\n\n\n

Withdrawals from the savings pot are taxed at a person\u2019s marginal income tax rate to reinforce the intention that these funds should be used only in cases of genuine financial need.<\/p>\n\n\n\n

The retirement pot is not accessible until the people reached reitemnt age, even if an individual resigns, changes jobs, or faces financial hardship. The only exception has been if a person ceases to be a South African tax resident.<\/p>\n\n\n\n

While Axelson did not provide a specific reason for reconsidering access to the retirement pot, growing financial pressure on older South Africans is likely a key factor.<\/p>\n\n\n\n

Recent data from consumer analytics group Eighty20 shows a rise in loan defaults among South Africans aged 65 and older.<\/p>\n\n\n\n

This trend goes agasint that of the broader population, where default rates have been steadily declining since 2023.<\/p>\n\n\n\n

\u201cWe saw a sustained rise in the number of defaulters, which is accelerating rather than stabilising,\u201d said Eighty20 director Andrew Fulton.<\/p>\n\n\n\n

This makes older consumers unique among the group\u2019s eight tracked segments and highlights the mounting financial strain facing retirees. <\/p>\n\n\n\n

South Africans rushing to dip into their retirement funds <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The broader outlook for retirement in South Africa is also concerning, with many individuals doubtful about their ability to retire comfortably.<\/p>\n\n\n\n

\u201cIf you read the research on retirement, it is quite frightening and sobering. FNB finds that only 10% of South Africans believe they\u2019ll be able to retire comfortably at age 60,\u201d Fulton said.<\/p>\n\n\n\n

At the same time, there are growing concerns that easier access to retirement funds could worsen long-term financial outcomes.<\/p>\n\n\n\n

Fulton warned that many individuals are already undermining their future financial security by withdrawing from their savings pots to meet immediate needs.<\/p>\n\n\n\n

\u201cWith the two-pot system, what we\u2019re seeing is that a lot of people are making that future situation even worse to pay for today\u2019s needs and expenses, and they\u2019re not replacing that,\u201d he said.<\/p>\n\n\n\n

Rising living costs\u2014particularly healthcare\u2014are adding further pressure. Fulton noted that medical expenses for retirees typically increase at roughly double the rate of inflation, placing additional strain on already stretched finances.<\/p>\n\n\n\n

Early data from the two-pot system also highlights the scale of financial pressure. More than 100,000 South Africans have already accessed their savings pots in the 2026\/27 tax year.<\/p>\n\n\n\n

According to Vickie Lange, Head of Solutions Enhancement at Alexforbes, there was a sharp surge<\/a> in withdrawals at the start of the new tax year.<\/p>\n\n\n\n

\u201cMore than 140,000 claims were received during the first week of March, with approximately 84,000 already paid,\u201d she said.<\/p>\n\n\n\n

\u201cThe first claim was submitted at 00:01 on 1 March, underscoring the immediate demand for access to savings,\u201d Lange added.<\/p>\n\n\n\n

She noted that most of the activity was driven through the company\u2019s digital systems, with more than 1.3 million logins recorded on its platform over the same period.<\/p>\n\n\n\n

Lange said that the strong early uptake highlighte the urgent need among many South Africans to access available funds. <\/p>\n","protected":false},"excerpt":{"rendered":"

The National Treasury is considering the possibility of allowing limited access to funds that are currently strictly preserved until retirement.<\/p>\n","protected":false},"author":92,"featured_media":820023,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[25049,25050,853,10183],"class_list":["post-854409","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-parliaments-standing-committee-on-finance","tag-select-committee-on-finance","tag-south-africa","tag-the-national-treasury"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854409","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\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=854409"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854409\/revisions"}],"predecessor-version":[{"id":855808,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854409\/revisions\/855808"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/820023"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=854409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=854409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=854409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}