Since its introduction on 1 September 2024, the two-pot retirement system has reshaped South Africa’s retirement savings by offering a balance between long-term goals and short-term financial needs.
Across the 1.1 million actively contributing members administered by Alexforbes, more than 650 000 savings pot claims worth R9.5 billion were processed in the first year. On average, claims were finalised in seven working days. In the current tax year (from 1 March 2025), over 270 000 claims worth R2.5 billion have already been paid.
Despite the high claim volumes, Alexforbes has maintained strong administrative performance, processing 95% of its 150 000 annual exit claims (resignation, retrenchment and retirement) within agreed servicing standards.
Key member insights
- A high rate of repeat withdrawals has emerged: 70% of members who accessed their savings pots this tax year had also withdrawn last year. The Alexforbes member survey showed that 80% of withdrawals were used to reduce debt or cover essential living costs.
- In September 2024, over 230 000 savings pot claims were processed, representing 60% of total claims in the first tax year.
- In March 2025, claims exceeded 95 000 ‒ a marked increase at the start of the new tax year.
- More than 35% of members withdrew most of their once-off seed capital allocation.
- 5% of provident fund members aged 55 or older on 1 March 2021 have opted into the two-pot system by 31 August 2025. From 1 September 2025, members who did not opt in will no longer have this option.
- 65% of members have not withdrawn from their savings pots ‒ evidence that many are making informed decisions about preserving their long-term retirement savings.
- Of the 35% who did withdraw:
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- 14% have withdrawn in both tax years
- 15% withdrew only in the previous tax year
- 6% withdrew for the first time this tax year
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Supporting members in making smart choices
Alexforbes continues to strengthen digital platforms and tools that empower members to make informed decisions.
AF Connect, the member portal, enabled 90% of savings pot claims to be submitted online. In addition, the Two Pot Calculator and My Money Matters toolkit, provide relevant guidance.
Digital exits, a process initiated when members leave an employer, helps members navigate options for their vested, savings and retirement pots, with direct access to advice via smartphone.
Solutions such as AF+ and AF Rewards extend support. AF+ provides financial advice and debt solutions, while AF Rewards helps members stretch their household budgets with discounts on everyday essentials.
Retirement pots: Building long-term security
While withdrawals from the savings pot have drawn attention, the retirement pot is the driver of improved long-term outcomes. Since 1 September 2024, two-thirds of member contributions (66.7%) have been channelled into retirement pots, with an average balance of R22 000.
These funds are invested until retirement, helping to secure significantly better incomes. Alexforbes estimates that retirement outcomes for new members could improve by two to two and a half times. This is critical given that current replacement ratios average only 31% (which is equal to R310 of income for every R1 000 earned before retirement).
Key messages for members
- Withdrawals reduce both retirement income and cash at retirement.
- Withdrawals are taxable and may push members into a higher bracket.
- Savings pots should be preserved for genuine emergencies.
- Members can boost their retirement savings through higher or voluntary contributions.
- Preserving the vested pot until retirement protects long-term benefits.
- Financial advice is strongly recommended before making decisions about retirement savings.
Looking ahead
The introduction of the two-pot system is one of the most significant shifts in South Africa’s retirement funding history. Already, members are engaging more actively with their savings, while retirement pots are compounding towards stronger future outcomes. The system is delivering benefits today, while shaping a more sustainable and member-focused retirement environment for tomorrow.
Alexforbes is a financial services group that impacts people’s lives by delivering insight and advice to individuals, employers and retirement funds. Listed on the Johannesburg Stock Exchange. www.alexforbes.com
