Major South African bank changes retirement age

Standard Bank’s executive retirement age will increase from 60 to 63 years, which comes amidst a worldwide move towards higher retirement ages.

Standard Bank announced on Friday, 27 June 2025, that it is increasing the normal retirement age for its executives from 60 to 63 years. Its current CEO, Sim Tshabalala, is 57 years old.

The banking giant explained that this change forms part of the group’s ongoing commitment to attracting, retaining, and nurturing top-tier talent. 

This change will take effect on 1 January 2026, and the bank clarified that all other employees’  normal retirement age remains unchanged. 

“The revised executive retirement age aligns Standard Bank with prevailing practices across the financial services industry, ensuring that the bank remains competitive in the global and local talent market,” it explained. 

“It reflects the evolving nature of executive leadership and the increasing value of experience, continuity, and institutional knowledge in driving long-term growth and innovation.” 

“This change also ensures that Standard Bank is not an outlier in what is a highly competitive market for key talent.”

The bank believes this decision gives it a powerful competitive advantage in meeting its financial targets and achieving its growth ambitions.

Standard Bank’s decision comes amidst a trend of companies worldwide shifting to higher retirement ages.

Investec Wealth & Investment wealth manager Mark Henson recently argued that, considering people are living longer, companies need to question the wisdom of keeping the retirement age at 65.

He explained that people living longer not only means they should be able to work longer, but also that investment strategies may need to shift to accommodate longer lives.

“From a financial perspective, the generally accepted industry norm is that you should spend two-thirds of your life in the accumulation phase saving for retirement, and a third in drawdown,” he said.

“Through medical advancements, life expectancy is being pushed out all the time, so this is a dynamic reality and one that requires regular revision.”

Moving away from 65

Henson explained that the pension, as a concept, came about in the 1880s, when German Chancellor Otto von Bismarck faced a social revolt and needed a mechanism to pacify the nation.

Von Bismarck’s solution was to introduce a social pension scheme that promised government support for older citizens. 

Henson said the retirement age for this pension was initially set at 70, though this was later lowered to 65. 

“The challenge with the system at the time, from a societal perspective, was that life expectancy was a lot lower than it is today, so few people enjoyed the benefits of this scheme in its earlier years,” he said. 

“The US adopted a similar model more than 50 years later, and the magical number of 65 was also chosen – and in many instances, this is still in place today.”

However, Henson argued that the world has changed significantly from 130 years ago. 

“If the futurists are correct and the first person to live to 150 has been born, why is the normal retirement age still 65? Should the retirement age be the same across all industries?” he questioned.

From a South African perspective, it should also be noted that, regardless of how long people live, many simply cannot afford to retire at 60 or even 65.

Research from Sanlam recently revealed that South Africa’s “true retirement age” – the age at which most citizens can afford to retire comfortably – is closer to 80.

“Our internal member data indicates that while 65 remains the official retirement age, most South Africans can’t afford to retire at this age,” the insurer said. 

“Most people will need to work an additional 15 years to achieve financial security in retirement.”

Sanlam explained that this 15-year gap represents a significant financial challenge and a fundamental shift in how South Africans think about retirement planning and employee benefits. 

“This gap between expectation and reality presents significant challenges for individuals, businesses, and the broader economy,” Sanlam Corporate CEO Kanyisa Mkhize said.