Retirement fund administrator Alexforbes has already received thousands of savings pot withdrawal claims from the two-pot system since March 1.
Image: Freepik
As the new tax year kicked off this month, retirement fund administrator Alexforbes says it has already received over 33 000 savings pot withdrawal claims from members.
It said this followed 260,000 logins on its AF Connect digital platform since March 1. Trade union federation Cosatu said last month that it had submitted proposals to the government, requesting greater access for workers to their pension funds under the two-pot system
Alexforbes said research also showed that those who claimed in the previous tax year had a high likelihood of claiming again in the new tax year.
"This already appears to be the case, given the significant numbers of claims in just four days. This high level of claims so early in the tax year once again highlights that many South Africans are financially stretched."
The retirement fund administrator said a previous survey it had carried out showed that 80% of claimants used their withdrawals for debt repayment and essential living expenses.
However, it added that indications from banks suggest that some individuals are using the withdrawals for consumption.
Alexforbes also urged members to consider the long-term impact of withdrawing from their retirement savings.
"The introduction of the savings pot is a positive step toward financial flexibility for South Africans. However, its success depends on responsible use. Alexforbes urges all retirement fund members to consider their long-term financial well-being, carefully evaluate their need for immediate withdrawals, and take the necessary precautions to protect themselves from cyber threats."
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