What Borrowing From Your Future Self Costs You

By Bheki Mkhize, CEO of FNB Wealth and Investments

Nearly half of under-60s with retirement products have dipped into their savings pots, mostly to get through the month. The 2026 FNB Retirement Insights Survey suggests the right response is empathy and better design

Nobody raids their retirement savings unless they are facing difficult economic pressure today. That is worth saying upfront, because the two-pot retirement system has become one of the most moralised subjects in South African money conversations, and the moralising has taught us very little. The 2026 FNB Retirement Insights Survey, now in its fourth year, set out to understand the behaviour instead. What it found is a system being used exactly as people under real pressure could be expected to use it. This deserves our attention rather than our judgement.

A safety net, used as a wallet

The two-pot system was designed to relieve pressure. It gives people access to a portion of their retirement savings in a genuine emergency, without forcing them to dismantle their long-term security. Since the system opened in September 2024, R79.3 billion has been approved for withdrawal from savings pots nationally.

Our survey found that 49% of under-60s who hold retirement products have made a withdrawal, which works out to almost half of all under-60s. And the reasons people give are strikingly ordinary. Day-to-day expenses come first, followed by buying appliances and paying off debt.

For a household where the month outlasts the money, the savings pot can look like the only liquidity within reach, and in a true emergency it is doing what it was built to do. The more specific concern is that withdrawals are being driven by recurring expenses rather than rare shocks. In other words, a safety net is being used as a wallet, and a wallet gets opened every month.

Borrowing from your future

Money taken out of a retirement pot at age 35 is priced in today’s rands but you’re “paying” it in tomorrow’s rands, because the amount that leaves your retirement savings is the amount that hasn’t had enough time to grow properly. If you left it alone for thirty years, it would have compounded in the background, which is the entire point of retirement saving. Compounding is powerful because it is “invisible” when you leave it alone, and the loss is only felt some decades later, by a version of you who cannot send the money back.

Half of the people we surveyed say they fully understand the two-pot rules, a quarter partly understand them, and the remainder, roughly one person in seven, does not know them at all. Two years into the system, those gaps matter.

The impact of debt

If you look at reasons for the withdrawals, you find debt. Among lower-income under-60s, debt servicing now takes eight cents of every rand of disposable income, up from five in 2024, and in our qualitative conversations debt and daily expenses surface again and again as the reason retirement saving never starts properly. The pattern follows people who have retired already too. More than a quarter of lower-to-middle-income over-60s told us they are surprised to still owe money at their age. It was never part of their plan and it keeps constraining their choices. It’s little wonder that a clear majority of lower-income consumers describe paying off debt as essential groundwork for retirement.

This is also where the most defensible use of a two-pot withdrawal lives. Settling expensive debt with retirement money can genuinely strengthen a retirement, provided the instalment it frees up is redirected into saving rather than absorbed into the monthly spend. That proviso is everything. Clear the debt and redirect the instalment, and you have converted a liability into a contribution. Clear the debt and absorb the instalment, and you have simply moved the problem twenty years down the road, minus the growth.

Progress and pressure

It would be easy to read all of this as a country failing to save, and that reading would be wrong. The same survey shows the share of disposable income going to retirement savings has climbed to ten cents in every rand, up from seven two years ago, with the steepest rise among lower-income households. South Africans are attempting something genuinely hard: servicing the present and funding the future out of the same stretched income, often while supporting parents and children at the same time. Progress and pressure are both real, and any honest conversation about the two-pot system has to hold them together.

Before you withdraw

So, what should a person under pressure actually do?

Firstly, price the withdrawal in “future money” before you make it today. Ask your financial adviser what the amount you want to withdraw would likely be worth at retirement, and decide with that number in front of you rather than the one on the slip. Then exhaust the cheaper ways to manage liquidity first, like an emergency buffer if you have one, or a restructured repayment plan. The savings pot should be the last resort rather than the first stop.

Then, if you do withdraw to settle debt, put the freed-up instalment straight into a debit order that pays your future self. And treat any withdrawal as a loan from that same future self, with a repayment plan you actually set up. The system will let you take the money out. Only you can decide to put it back.