SPENDING AND SAVING: Two-pot, two years later: savings are used to put food on the table

Households increasingly rely on retirement money for basic living and everyday expenses.

When the two-pot retirement system was introduced, the fear was that South Africans would raid their savings pots for holidays, gadgets and soft-life spending.

Two years later, the system has done exactly what it was designed to do: give workers limited access to part of their retirement savings without forcing them to resign. But the withdrawals are also showing something uncomfortable about household finances. Many people are using their ­savings pot withdrawals just to get through the month.

Michelle Acton, chief customer officer at Old Mutual Corporate, says the group surveyed members before the system went live, again after the first six-month window and then after the March 2025 to February 2026 tax year. The last two surveys drew responses from about 35,000 claimants.

Before the system was launched, people said they would use the money for emergencies and debt. But Acton says the latest ­survey shows the top reason is no longer to cover debt. “The top reason is basic living,” she told EBnet, an independent digital knowledge portal and information network serving the retirement, healthcare and employee benefits industry.

Acton says members are using two-pot money to buy food, support family members and pay school fees, rent and electricity. Where withdrawals are used for debt, it is mostly unsecured debt, not home loans or car financing. In other words, people are settling personal loans, family loans and the kind of debt that usually fills the gap between income and survival.

This explains why the two-pot debate has matured. The issue is no longer whether people should be “allowed” to access the ­savings pot. The law allows it and many households need it. The bigger question is what happens to the money that must stay invested.

There is some good news. Acton says Old Mutual has seen preservation rates rise by 33%, whereas cash withdrawals on exit fell from 61% to below 50%. She also says the number of people saying they will withdraw again has almost halved.

The Sanlam Benchmark Survey 2026 points to the same shift. Sanlam found that 84% of stand-alone funds and 80% of umbrella funds reported increased member engagement since the two-pot system was implemented. People are paying attention to retirement savings in a way they have not for years.

But attention is not the same as adequacy. Sanlam Corporate’s chief executive, Kanyisa Mkhize, says retirement confidence is built over decades, through decisions such as preserving savings, increasing contributions where possible and managing debt.

That is the real two-pot lesson. The savings pot has become a pressure valve for a country living too close to the edge. The retirement pot is the promise that the whole system will not collapse into short-term ­survival.

The next fight is not to shame people for withdrawing. It is to help them preserve what remains, understand tax, avoid expensive debt and rebuild emergency savings outside the retirement fund. Because if the savings pot becomes the grocery pot every year, the system will have solved one crisis by feeding another.