Since the start of the new tax year on 1 March 2025, Alexforbes has seen a second wave of interest from retirement fund members in checking their balances and submitting savings pot claims. Fund members may access their savings pots once every tax year with over 400 000 having done so via Alexforbes between September 2024 and February 2025 during the first wave of withdrawals.
With the start of the tax year, an initial four-day surge saw 33 000 withdrawal claims, sparking concerns that South Africans were dipping back into their savings pots at the same rate as before. However, the daily volume of claims has since tapered off. To date, Alexforbes has successfully paid 55 000 claims, while the remaining claims continue to progress through the claims cycle.
While many members are making withdrawals, it is encouraging to see that a large proportion of those eligible have chosen not to do so. Instead, they are keeping their savings pots invested for retirement or emergencies – the original purpose of the savings pot component. This suggests that the significant efforts by employers, trustees and the industry to educate and support members is having a positive impact. While the savings pot offers members flexibility to manage financial emergencies, Alexforbes urges retirement fund members to carefully assess the long-term consequences of such withdrawals.
Members should consider:
Preserving retirement savings.
Withdrawals reduce the amount available for retirement. Funds should only be accessed in cases of genuine
financial emergencies.
Understanding tax implications.
All withdrawals are subject to taxation, which could impact a member’s overall tax liability.
Cybersecurity awareness.
With heightened withdrawal activity, cybercriminals may increasingly target retirement fund members. To
stay protected:
- Only use official channels for transactions.
- Never share banking details, OTPs or login credentials.
- Authenticate any withdrawal-related communication.
Currently, retrenched members can access their vested and savings components provided they have not already done so within the same tax year, but not the retirement component as this remains preserved until retirement.
