JOHANNESBURG – Several investment houses have reported a surge in withdrawals from the two-pot system since its introduction in 2024.
Government introduced the system to allow households to access a portion of their retirement savings before the mandatory age.
Now, National Treasury is reportedly mulling an idea to allow broader access to the retirement pot of savings in the two-pot system.
READ | Two-pot withdrawals showing consumers under strain
Deputy Director-General: Tax and Financial Sector Policy at National Treasury, Chris Axelson said the withdrawal would be in a case of dire financial distress under strict conditions.
These could possibly be:
You should not be getting any other benefitsShould not have an incomeHave no other financial support
Axelson says further conversations still need to be had on what would be the most reasonable way to do this without undermining the progress that has been made in the two-pot system.
“If you’ve got a huge amount in that retirement pot but, you’ve got nothing else, potentially you could get some access. It would not be the full access, we would look at all these conditions and say that maybe you can get a small portion, a small portion per year perhaps,” he said.
Previously when you resigned from your employment you could take everything in full, but this has now changed.
The two-pot system splits the amount that one is able to access into a savings pot and a retirement pot meant to support long-term retirement savings.