Please note: The changes are still in draft form and not finalised as yet. As such, this update is based on what is currently known, and that could still change.
Currently, you can only access your retirement savings upon retirement or resignation, or emigration if you are a member of a retirement annuity fund. The two-pot retirement system aims to give people access to some of their retirement savings in case of financial emergencies while preserving the bulk of it for retirement. The new system will result in three components, a vested pot, a savings pot and a retirement pot.
The vested pot will be your retirement savings as at 31 August 2024 after allowing for the 10% seed capital that will be used to fund your savings pot. This one-off allowance will be limited to the lesser of 10% of your balance or R30 000. This component will not be affected by the rules that will apply to the savings pot and retirement pot.
The savings pot will consist of the seed amount and one third of all contributions plus growth from 1 September 2024. You will be allowed one withdrawal from this component per 12 month period for financial emergencies provided that the withdrawal is R2 000 or more. You will be taxed at your marginal tax rate on the amount withdrawn.
The retirement pot will be the remaining two thirds of all contributions from 1 September 2024. You will not be able to access this component until retirement.
Any savings that you may have in a preservation fund on 31 August 2024 will not be affected by these changes and the current rules will continue to apply.
We will keep you informed of the changes when we have more details of the legislation.
Please note: The changes are still in draft form and not finalised as yet. As such, this update is based on what is currently known, and that could still change.
Currently, you can only access your retirement savings upon retirement or resignation, or emigration if you are a member of a retirement annuity fund. The two-pot retirement system aims to give people access to some of their retirement savings in case of financial emergencies while preserving the bulk of it for retirement. The new system will result in three components, a vested pot, a savings pot and a retirement pot.
The vested pot will be your retirement savings as at 31 August 2024 after allowing for the 10% seed capital that will be used to fund your savings pot. This one-off allowance will be limited to the lesser of 10% of your balance or R30 000. This component will not be affected by the rules that will apply to the savings pot and retirement pot.
The savings pot will consist of the seed amount and one third of all contributions plus growth from 1 September 2024. You will be allowed one withdrawal from this component per 12 month period for financial emergencies provided that the withdrawal is R2 000 or more. You will be taxed at your marginal tax rate on the amount withdrawn.
The retirement pot will be the remaining two thirds of all contributions from 1 September 2024. You will not be able to access this component until retirement.
Any savings that you may have in a preservation fund on 31 August 2024 will not be affected by these changes and the current rules will continue to apply.
We will keep you informed of the changes when we have more details of the legislation.
