HALF OF SA’S POPULATION LACKS THE MEANS TO PROVIDE FOR THEIR RETIREMENT

Sun 14 July 2024:

Fifty percent of South Africans do not have the means to provide for their retirement. This is according to the FNB Retirement Insights Survey 2024, SABC News reported. More concerning is that the number of South Africans without retirement plans is increasing, particularly among the middle and lower-income earners.

The high cost of living and elevated interest rates are some of the reasons South Africans say hamper their retirement.

The FNB survey found that only 50 percent of respondents have a retirement plan in place.

FNB Wealth and Investment Product Head, Samkelo Zwane, says the survey found that when it comes to planning for retirement, income levels play a significant role, with lower income individuals facing more challenges planning for their retirement.

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“What’s happening is basic goods and services are taking up a lot of their income. That’s basically what’s happening here. Only two percent of their income is left to put towards retirement savings and, when you look at the upper income earners, only 12% is left towards actually saving for retirement.”

The survey also found that only 25 percent of respondents who have retirement funds are not on track with their retirement goals.

Zwane explains, “The 25% that are not on track to meet their retirement goals site economic factors or macro factors as being involved. That is economic factors, inflation and cost-of-living, emergency and unplanned events coming out strongly as well as time in the market and procrastination.”

Stats SA figures show that more employers prefer to hire staff on a contract basis. A number of companies are now structuring salaries in a way that places the onus on workers to find their own retirement plans.

Often employees choose to pocket the money. FNB says less than 10 percent of South Africans will be able to retire comfortably.

The survey found that many people in retirement still rely on their children, while some are still servicing debt.

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