{"id":874222,"date":"2026-09-07T14:14:30","date_gmt":"2026-09-07T12:14:30","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=874222"},"modified":"2026-09-07T14:57:18","modified_gmt":"2026-09-07T12:57:18","slug":"last-resort-for-south-africas-middle-class","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/874222\/last-resort-for-south-africas-middle-class\/","title":{"rendered":"South Africa’s middle class is turning to a last resort"},"content":{"rendered":"\n

South Africa’s middle-class households are emerging as the biggest withdrawers of two-pot retirement savings, taking the money to cover their basic needs as financial pressures mount.<\/p>\n\n\n\n

According to Momentum Corporate’s Nashalin Portrag, this has been a surprising revelation in the two years since regulations were changed to allow access to these savings.<\/p>\n\n\n\n

When the two-pot retirement system was introduced, many had assumed that withdrawals would be evenly distributed across all income groups, Portrag said.<\/p>\n\n\n\n

However, two years later, it turns out that middle-income households are most often dipping into the funds.<\/p>\n\n\n\n

Portrag said this boils down to the rules of the system itself, which requires that a minimum of R2,000 be held in savings to make a withdrawal.<\/p>\n\n\n\n

“Many lower-income and emerging middle-class members can\u2019t withdraw at all because their savings fall below the R2,000 minimum required by law,” Portrag said.<\/p>\n\n\n\n

“Middle-class members, on the other hand, usually have enough saved to draw on, which turns their retirement savings into a backup emergency fund when the cost of living keeps rising.”<\/p>\n\n\n\n

Momentum carried out a survey of South Africans withdrawing from their pots, revealing that the money isn’t being funnelled into ‘wants’, like holidays or luxuries, or into other investments.<\/p>\n\n\n\n

Instead, most of the money is being used for everyday living expenses or to relieve other pressures like debt.<\/p>\n\n\n\n

This is an indication of “real financial pressure”, the group said, with many turning to their retirement savings to survive today.<\/p>\n\n\n\n

“People aren\u2019t withdrawing to pay for holidays or investments but to survive: 44% of withdrawals go toward paying off debt, 23% to cover everyday living expenses, and 20% toward education,” the group noted.<\/p>\n\n\n\n

Before the system launched, many expected an even split between paying off debt and building savings.<\/p>\n\n\n\n

Instead, rising interest rates, inflation, and existing debt repayments have pushed people toward using their two-pot savings simply to stay afloat. <\/p>\n\n\n\n

“For the established middle class in particular, salary increases are not keeping up with debt and rising costs,” Portrag said.<\/p>\n\n\n\n

“Once other options, such as credit cards, loans, and family support, run out, retirement savings become the last resort<\/strong>.”<\/p>\n\n\n\n

Robbing your future self<\/h2>\n\n\n\n
\"\"<\/a>
Nashalin Portrag, Head: FundsAtWork & Distribution Momentum Corporate<\/figcaption><\/figure>\n\n\n\n

Portrag noted that the data shows a gap in what people intend to do with their two-pot savings and what actually happens.<\/p>\n\n\n\n

In 2025, 74% of members said they would only access their savings component in a real emergency. <\/p>\n\n\n\n

By 2026, however, only 48% of eligible members had not made a withdrawal. That\u2019s a 26% gap between ‘good intentions’ and financial reality.<\/p>\n\n\n\n

“Age and life stage also matter,” he said, noting that mid-career millennials, for example, are most likely to make repeat withdrawals as they juggle home loans, debt, and raising children. <\/p>\n\n\n\n

Gen X members tend to withdraw once and stop. Baby Boomers are the most likely to leave their savings alone, aided by greater financial stability and proximity to retirement. <\/p>\n\n\n\n

The data show that South Africa’s middle class and middle-income households face future challenges.<\/p>\n\n\n\n

According to Thys van Zyl, Chief Executive Officer of Everest Advisory Services, the system was designed to strike a balance between short-term financial pressure and long-term retirement planning.<\/p>\n\n\n\n

While this alleviates pressure in the short term, every time money is withdrawn, that capital loses the opportunity to compound over many years.<\/p>\n\n\n\n

The greatest risk is not a single large withdrawal but rather a series of smaller withdrawals over time, he said.<\/p>\n\n\n\n

If people pull from their retirement savings now, it leaves less in the pot when they actually retire, potentially increasing the burden on the state to cover them.<\/p>\n\n\n\n

More encouragingly, Momentum noted that, of those who withdrew, 45% only did so once, and 10% say they won\u2019t withdraw again.<\/p>\n\n\n\n

“Many members have learned, after seeing tax deducted and their long-term growth shrink, that repeat withdrawals come at a real cost,” it said.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s middle-class households are emerging as the biggest withdrawers of two-pot retirement savings, using it as a last resort to cover basic costs.<\/p>\n","protected":false},"author":10,"featured_media":862273,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2096935275972771905","_sma_facebook_post_id":"191437357620492_2198516927635373","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[16092,4646,26431],"class_list":["post-874222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-momentum-corporate","tag-retirement","tag-two-pot-savings"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874222","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=874222"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874222\/revisions"}],"predecessor-version":[{"id":874238,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874222\/revisions\/874238"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/862273"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=874222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=874222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=874222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}