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Two-pot retirement system

From 1 September 2024, your retirement savings will be split into a vested, savings and retirement component. The vested component will be made up of your retirement savings on 31 August 2024. You’ll have access to a cash portion (savings component) while preserving the rest for retirement (retirement component).

Illustration of 3 clay pots with patterns showing vested component, 1/3 savings component and 2/3 retirement component.

What is the two pot retirement system?

From the proposed date of implementation on 1 September 2024, the two-pot system will change the future of retirement planning in South Africa.

Here's what you need to know:

The vested component: This component is made up of your retirement savings on 31 August 2024. This money will be protected, and the two-pot rules will not apply to it. 10% of your retirement savings or R30 000, whichever is the lowest, will be transferred to the savings component.
The savings component: One third of your contributions from 1 September 2024 will go into your savings component. You can tap into this component once every tax year for an emergency. The minimum withdrawal amount is R2 000 and will be taxed at your marginal income tax rate. You will also pay a processing fee.
The retirement component: Two thirds of your contributions from 1 September 2024 will go into your retirement component. You can only access this component at retirement and must use it to buy a pension.
Black family of three with the little boy on his father’s shoulders and the mother looking at them smiling.

Why is the two-pot retirement system important

  • The two-pot system can help you save more for retirement, protect your retirement savings, and make better retirement planning decisions.
  • The savings component gives you access to some of your retirement savings in an emergency. This can help you avoid dipping into your retirement savings too early, which can reduce the amount of money you have available when you retire.
  • The retirement component is locked away until you retire. This helps protect your retirement savings from being accessed too early or lost due to financial hardship.

Two-pot resource centre

Find all the resources and tools you need to understand how the two-pot system will impact your retirement goals.

Need help?

Here is the place to find the latest updates on the legislation so you can always make informed financial decisions.


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