On 1 September, 48 of South Africans who are members of pension funds want to withdraw funds under the new two-pot retirement system.
The system was designed to preserve their retirement savings and not to give members early access to some of their retirement savings.
This shows a clear gap in implementing the new system. Financial education is needed for members of pension funds to ensure they think carefully before withdrawing some of their retirement funds.
Research from Worth, a company that drives financial behavioural change, shows that 48 of working consumers will or are considering withdrawing from their new savings pot on 1 September, with the majority citing this as an opportunity to repay or reduce debt and loans 51 or cover everyday expenses 43.
Of these consumers planning to withdraw, 68 do not have up to R10 000 saved in an emergency fund. In addition, 54 of those withdrawing indicated that they plan to do it every year and a further 15 said they will if they need the cash.
