Retirement Insights
By Bheki Mkhize
The principle behind the system is important. It recognises that people face real financial emergencies, while still trying to protect the retirement savings they will need later in life. At face value, this makes a lot of sense - but the two-pot system's long-term success depends heavily on how well it is understood and how appropriately it is used. The 2026 Retirement Insights Survey findings build on the insights from last year that revealed widespread awareness of the two-pot system. Actual withdrawal rates were relatively low in 2025, with less than one third of those who said they were aware of the system indicating that they had withdrawn from their savings pot. That restraint was encouraging.
In 2026, the research points to the two-pot system becoming a bigger part of how consumers manage financial pressure. Awareness has grown, but withdrawals continue to be driven mainly by immediate needs, including day-to-day expenses, household purchases and debt. In other words, many people are using their savings pot because their present financial challenges feel more pressing than their need for long-term retirement preparation. Of course, short-term challenges are precisely why government introduced the two-pot system. For a household facing a genuine emergency, access to the savings pot can provide real relief. It may help prevent further borrowing, protect a family from defaulting on obligations, or cover an unavoidable cost. Used carefully, the savings pot can act as a pressure valve in a difficult financial moment. The danger, however, is that short-term relief can come at a long-term cost.
Every withdrawal reduces the capital that remains invested for the future. It also reduces the opportunity for that money to grow over time. The effect may not feel significant when the withdrawal is made, especially if the amount seems small relative to the immediate problem being solved. But retirement outcomes are shaped by compounding, consistency and preservation. Repeated withdrawals, or withdrawals made for the wrong reasons, can significantly weaken a retirement plan over many years. The phrase "borrowing from tomorrow" captures this trade-off well. The savings pot may feel like accessible money, but it is still retirement money. Using it today means the future version that the individual had is no longer as easily attainable. And while that trade-off may be justified in some circumstances, if it can be avoided, it should.
The research also shows that the temptation to use retirement savings is strongest where financial pressure is highest. When emergencies happen, expenses pile up, or debt needs to be repaid, the savings pot can easily become part of monthly cash-flow management rather than a carefully protected emergency resource. That behaviour needs to be addressed. The two-pot system should not be a substitute for budgeting, emergency savings, debt management or proper retirement planning. It should not be used simply because it is available. Rather, a withdrawal should be considered only after honestly evaluating that it is to cover a genuine need and that there is no other way to manage the financial pressure. Deciding whether to withdraw or not, should also involve answering questions around what it will cost in the long term and what it will take to restore retirement provision to what it was before the withdrawal.
Here, financial institutions and advisers have an important role to play. We need to help customers understand not only how to access the savings pot, but also when access is appropriate. The conversation needs to be framed around consequences, alternatives and recovery prospects. If a customer does chose to withdraw their savings, there should be a plan to rebuild. And ff a customer chooses not to withdraw, there should be support offered to manage the immediate pressure in another way. The goal is not to make people feel guilty for needing access to their savings pot in difficult times. It is to ensure that access does not undermine the very retirement security the system was designed to protect. Used wisely, the savings pot can provide relief when it is truly needed. Used too often, or for the wrong reasons, it risks turning today's short-term financial pressure into tomorrow's retirement shortfall.
