How does it work?

 

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Savings pot

One-third of your contributions will go into your savings pot. You can make withdrawals once every tax year.

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Retirement pot

Two-thirds of your contributions will go into your retirement pot. Your savings are locked until you retire.

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Vested pot

All funds in your retirement savings as of 31 August 2024.

How does the Two-Pot Retirement System affect me?

  • A little background

    The Two-Pot System marks a significant change to South Africa's retirement landscape. It's designed to provide you with a safety net in times of financial crisis while encouraging long-term savings.  

    All your future contributions to your retirement fund will be split into two pots: a savings pot and a retirement pot. Your current retirement savings until 31 August 2024 will remain preserved in a vested pot.

  • Savings pot

    • One-third of your retirement contributions from 1 September 2024 will go into your savings component
    • You can withdraw* from this pot once every tax year
    • The minimum withdrawal amount is R2 000, taxed at your marginal income tax rate
    • No maximum limit to the amount you can withdraw
    • You will also pay an administration fee for any withdrawal.

       

    *Making a withdrawal has a big impact on your future. Take your time and think it through carefully, or consult your financial adviser.

  • Retirement pot

    Retirement Pot

    • Two-thirds of your contributions from 1 September 2024 will go into your retirement component
    • You can only access your savings at retirement
    • Ensures you have enough money to enjoy your golden years.
       

    Vested Pot

    • Your retirement savings up until 31 August 2024
    • On 1 September 2024, 10% of your retirement savings or R30 000, up to a maximum of R30 000, will be transferred to the savings component
    • Savings protected until you retire, or
    • You can access all your savings when you change employers
    • No further contributions can be made to your vested component from 1 September 2024.

  • Virtual adviser

    Speak to an Absa Virtual Adviser about how withdrawing for your savings can affect your savings.

If you're withdrawing, consider these options

1. To settle any credit arrears, contact Collections on 0861 222 271
2. To pay a lump sum on a credit product, call Credit Card on 0861 462 273, Personal Loans on 0860 100 372, Absa Vehicle Finance on 0860 669 669 or Home Loans on 0860 111 007
3. Open a TruSave account and benefit from a Digital Bonus Rate. Apply online.

Download Two-Pot Infographic

Frequently Asked Questions

  • What is the Two-Pot Retirement System?

    This new system divides your retirement contributions into two parts: a savings pot and a retirement pot. Your existing retirement savings will be placed in a third pot called the vested pot.
    The Two-Pot System aims to help you save for retirement while also providing a safety net for emergencies. This means you can access a portion of your savings during tough times without compromising your long-term financial goals.

  • When does the Two-Pot Retirement System start?

    The Two-Pot Retirement System is effective as of 1 September 2024.

  • How much of my savings goes into the savings pot?

    Of your retirement savings up to 31 August 2024, 10% (up to a maximum of R30 000) will go to your savings pot. After 1 September, one-third of your contributions will go into the savings pot, while two-thirds will go into the retirement pot.

  • How often can I withdraw from the savings pot?

    You can withdraw from the savings pot once every tax year.

  • How much can I withdraw from the savings pot?

    The amount you can withdraw depends on your fund's rules. There is usually a minimum withdrawal amount of R2 000, but the maximum can vary. 

  • Will I pay tax on withdrawals from the savings pot?

    Yes, withdrawals from the savings pot are subject to income tax. Your withdrawal will be taxed at your marginal tax rate. Additionally, any income tax you owe to SARS will be deducted from your withdrawal amount through a tax directive issued by SARS upon withdrawal.

  • Can I use the savings pot to pay off debt?

    Yes, you can. You can use any funds you choose to withdraw for whatever purpose you choose. Some South Africans are planning to use their withdrawals to settle arrears or pay off debt. If you are considering this option, it’s important to weigh up the impact on your long-term retirement goals, as well as the tax impact of withdrawing from your savings. 

  • Can I use the savings pot for a specific expense?

    You can use the savings pot for a specific expense, but it's important to note that this can affect your retirement savings. Also always keep in mind that you will pay tax on your withdrawal, which will impact the amount you have available for any expenses.

  • What happens to my savings if I don't use them?

    If you choose not to withdraw from your savings pot, the remaining funds will be taxed as a lump sum benefit upon retirement, following the retirement lump sum tax table. These tax rates are generally lower than the marginal tax rates applied to withdrawals before retirement.

  • Where can I find more information about how the Two-Pot Retirement System will affect me?

    You can contact your retirement fund provider for more information about the specific rules and regulations that apply to your retirement fund. If you need more information or assistance to decide whether you want to withdraw from your savings pot, and Absa Virtual Adviser can assist you. Contact us at 011 225 1797.

Need more help?

For virtual advice:

Call us on 011 225 1797

Email us at : advicegurus@absa.co.za