Up until now South Africans have been allowed to withdraw their entire pension or provident fund when leaving a job. This has left many with no savings at all when they get to retirement age.
But a new system, due to come into effect on 1 September 2024, will introduce a form of enforced saving. The new regime will ensure that a significant portion of retirement savings will be retained and only accessible on retirement.
This change will have profound implications for individuals – as well as the country’s economic future. That’s because savings have an enormous impact on a country’s economy. Higher rates of saving drive economic growth and well-being across countries, and through time.
