Alexforbes processed 370,000 claims with a value of R7 billion under the two-pot retirement system.
Image: Karen Sandison/ Independent Newspapers.
Alexforbes has revealed that by January 30, 2025, they had processed 370,000 claims with a total value exceeding R7 billion following the implementation of the two-pot retirement system on September 1, 2024.
This is according to insights based on a comprehensive survey of more than 8,200 responses and data analysis covering over one million members.
By allowing fund members to access a portion of savings for financial needs while preserving the remainder for retirement, projections indicate that retirement outcomes could improve by 2 to 2.5 times for new members.
By November 30, 2024, over 348,000 claims had been submitted, amounting to more than R6.5 billion. Around 65% of these claims were submitted in September 2024, the month when the two-pot system was implemented.
More than 97% of savings pot claims were processed by November 30, with an average processing time of eight working days.
By the end of January 2025, 370,000 claims were processed with a total value exceeding R7 billion.
Graph showing the rise in Alexforbes claims for the two-pot retirement system.
Image: File
According to Alexforbes, the high volume of claims indicates the immediate financial needs of members, as well as reinforces how crucial effective digital platforms and administrative capabilities are.
The insights showed that 76% of claims were from members aged 31-51, highlighting the major financial responsibilities of this age group.
According to Alexforbes, 59% of claims were from members with fund credits of less than R250,000 while 94% were from those earning salaries below R550,000.
Claims were observed across all sectors with the findings highlighting varying financial behaviours and needs across different industries, with the following distribution:
- 24% from wholesale and retail trade
- 10% from mining
- 9% from manufacturing
- 2% from professional and business services
- 2% to 8% for other sectors.
While 54% of respondents accessed their savings pot, 46% did not, which indicates informed decision-making and a growing trust in the two-pot system as a tool to balance retirement savings with imminent financial needs.
The majority of claimants (86%) were satisfied with their decision, which highlights that the system is meeting the expectations of most members.
According to the survey, 96% of respondents understood the long-term impact of withdrawals and tax implications. Engagement before implementation of the two-pot system helped to build trust between members and their retirement funds.
Among the respondents, 47% planned to claim in the future, while 34% of previous claimants intended on claiming again. From those who did not make an initial claim, 33% do not plan on claiming, while 13% are considering it.
Of the claimants, 80% used their withdrawals for debt repayment and essential living expenses, with 50% repaying debts and 30% covering essential costs.
Other uses included major purchases (13%) as well as financial investments, home improvements, medical bills, education and vehicle maintenance (7%).
"These findings indicate that members are prioritising financial stability when accessing their savings. Given this trend, debt solutions and rewards programmes could provide additional value to members, helping them better manage their finances while preserving long-term savings," Alexforbes said.
Last month, the South African Revenue Service (Sars) reported that it received 2,664,279 applications for tax directives for withdrawals from the two-pot retirement system.
Of the total number of applications, 2,403,379 tax directives were authorised for funding release and a total gross lump sum of R43.42 billion had been paid out.
The remaining applications were rejected for several reasons such as erroneous identity numbers and tax numbers, among others.
Sars also warned taxpayers that before the final sum is paid to the applicant, the pension fund will be advised to deduct any outstanding debt on behalf of the tax authority before distributing the funds to the member.
IOL Business
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