South African retirement crisis looming

Half of South Africans do not have a retirement plan, and even fewer will be able to retire comfortably. Many are working into retirement or relying on their children and the state after their careers end. 

The FNB Retirement Insights Survey for 2024 revealed this, showing that South Africans’ inability to retire places a significant burden on those around them and society. 

The 2024 survey sampled a broad South African demographic informed by FNB’s client base and is part of the bank’s efforts to manage a greater share of retirement funds. 

A major theme noticed by FNB is that recent economic conditions have significantly impacted South Africans’ retirement savings and finances. 

Only 40% of South African consumers feel secure about their finances, with a massive gap between higher-income South Africans and poorer consumers. 

Data from the survey shows that close to 50% of respondents are not planning for retirement, with economic challenges, high immediate financial obligations, and a resulting inability to save being some of the biggest barriers. 

The findings highlight a critical gap between the imperative for financial survival and the importance of long-term financial planning.

These poor outcomes are driven by South Africa’s ineffective retirement system, product head of FNB Wealth and Investments Samukelo Zwane said. 

The Mercer CFA Institute’s Global Pension Index ranked South Africa 38th out of 47 countries, with the country’s overall rating declining from 2023. 

South Africa’s rating dipped to 54 out of 100, receiving below-average ratings for adequacy and sustainability. 

The country’s comparatively poor retirement system is shown in the graphic below. 

FNB explained that this will likely worsen as South African consumers are hit hard by a rising cost of living and a stagnant economy. 

The survey showed that most household income in South Africa is spent on necessities such as groceries, medical aid, housing, and transport. 

These areas have seen significant inflation in recent years, with food prices rising by over 10.8% in 2023 after an increase of 9.2% in 2022. 

Fuel prices have also jumped, rising by 5.1% last year after surging 17.1% in 2022. With 85% of all goods in South Africa being transported by road, this has a massive impact on household finances. 

This has been compounded by housing costs, with the repayments on a R1.5 million home increasing by R4,600 per month compared to three years ago. 

A rising cost of living not only impacts the amount that consumers can save now but also has an outsized impact on the income needed to live in retirement. 

And so, it is unsurprising that only 10% of respondents think they will be fully retired at 60 and 38% of people over 60 are still working full-time. 

Another 37% of South Africans over 60 work part-time into their retirement. 

Many of these respondents rely heavily on family members and the state to provide for them into their retirement, placing significant pressure on the social welfare system and, oftentimes, their kids. 

21% of respondents said government grants will provide for them when they retire, or their spouse and wider family will fund their retirement. 

FNB said this risks creating a ‘sandwich’ generation of currently employed South Africans who have to care for their retired parents and their children, leaving little for them to save for their own retirement. 

This phenomenon is a major drive of 63% of South Africans saying they cannot afford to save for retirement, with all disposable income spent on other financial priorities. 

The dire situation many South Africans below 60 and above face regarding their retirement is shown in the below graphic. 


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