Two-pot withdrawals: what the numbers actually say
South Africa gave itself a new financial ritual on 1 September 2024. Once a tax year, you may take money out of your retirement savings without quitting your job first. The industry calls it the two-pot system. In the first two months R21.4 billion went out. By the end of year one it was around R57 billion, across something like four million transactions.
I went looking for these numbers after writing about what the country loses to gambling, which was R75 billion over roughly the same period. The two are not morally equivalent. A withdrawal is your own money arriving early, minus tax. But they are the same order of magnitude, and I did not expect that.
SARS does fine out of it
Withdrawals are taxed at your marginal rate, stacked on top of your salary. On the R47.7 billion gross paid out by late February, government collected about R13 billion. Take out R10,000 and somewhere between R1,800 and R4,500 is gone before the money reaches your account, depending on your bracket. I keep trying to think of another savings product where the exit fee is your income tax rate. I cannot.
Year two is the interesting part
The new tax year opened on 1 March and the claims came in immediately. Administrators say about three quarters of this year’s applications are repeat claims from people who withdrew before. The claims are also shrinking: Momentum’s average fell from R12,666 in September 2024 to R9,290 by March 2026, and 71% of claims are now under R10,000.
Smaller amounts, taken on schedule, by the same people. Whatever that pattern is, it is not what an emergency looks like. It looks like an annual bonus that happens to live inside a pension fund, with 1 March as its payday.
What I cannot tell from the data
Whether any given withdrawal was a mistake. Someone servicing store debt at 25% interest who pulls savings taxed at 18% has done the arithmetic correctly, and there are a lot of people in that position. The aggregate data cannot separate them from the people funding December with their sixties.
What it can show is that the habit is settling in, and that the real cost never appears anywhere. The growth a rand would have earned between age 35 and 65 simply fails to happen. No slip records it, nobody misses it on payday, and the pension statement thirty years from now will not itemise it either.
Next March is the test. If the repeat rate keeps climbing, two-pot has become a salary top-up scheme with extra steps, and someone at Treasury will eventually have to say so out loud.