R35 billion boost for South Africans

South Africans have withdrawn R35.1 billion from retirement funds since new laws came into effect three months ago, giving them early access to part of their savings.

The figure is almost double the amount the National Treasury forecast savers would tap after the implementation of a so-called two-pot pension system on 1 September.

South Africa’s central bank has said that a high-withdrawal scenario may help boost the country’s economic growth rate by as much as 0.3 percentage points this year.

A total of 2.15 million applications for withdrawals have been made to the South African Revenue Service since September with 1.91 million being issued, the SARS said in a statement on Tuesday.

“Since its inception, SARS has observed an unprecedented and steady increase in tax directive applications, likely reflecting the economic challenges faced by households,” it said.

South African consumers have been grappling with a high cost of living exacerbated by increased electricity, fuel and food prices. Interest rates remain at levels last seen in 2009, even after the central bank eased monetary policy in September for the first time in four years.