As South Africans navigate the financial landscape of the new tax year, a noticeable uptick in retirement fund withdrawals has ignited concerns among financial experts, reports Cape {town} Etc.
Since the start of the new tax year on 1 March 2025, Alexforbes, a prominent retirement solutions provider, has reported a second wave of heightened interest from members keen to check their balances and claim from their savings pots.
The company noted that over 400 000 members accessed their savings pots between September 2024 and February 2025 during an initial surge of withdrawals.
Head of Best Practice at Alexforbes, Vickie Lange, expressed alarm following an explosive initial four-day period, during which 33 000 withdrawal claims were processed. This resurgence has sparked fears of a potential trend that mirrors the withdrawal activity seen during the first wave last year.
‘However, it is worthy to note that the daily volume of claims has since tapered off, with an additional 35,000 claims lodged over the past 14 days.’
‘To date, Alexforbes has successfully processed 55,000 claims within just seven working days, while the remaining claims continue to progress through the claims cycle,’ she added, ‘reassuring members about the efficiency of their service,’ Lange said.
This notable rise in activity is not limited solely to claims but extends to a surge in member engagement on their digital platforms. The Alexforbes member portal, AF Connect, experienced a dramatic increase in logins, surpassing one million during this period compared to approximately 500 000 logins per full month in December, January and February.
This suggests a growing trend of members actively monitoring their retirement savings and considering whether to withdraw their pots during the tax year.
Despite concerns surrounding increased withdrawals, Lange noted an encouraging trend. Many members eligible for withdrawals are opting to preserve their retirement savings instead.
‘We are pleased to see that a significant proportion of those eligible have chosen not to withdraw, keeping their savings for retirement or emergencies as intended,’ Lange stated.
This behaviour reflects positively on the efforts made by employers, trustees and the industry to educate members on the importance of maintaining their savings for long-term financial health.
While the flexibility offered by the savings pot system can help members manage instant financial emergencies, Alexforbes emphasises the importance of informed decision-making.
‘We urge retirement fund members to consider the long-term consequences of such withdrawals.’
‘Retirement fund members should engage their retirement benefits counsellor about their options,’ Lange said.
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Picture: Towfiqu Barbhuiya / Unsplash
