Important changes for retirement funds from 1 September 2024
These changes are called the two-pot system.
Before 1 September 2024, all your retirement savings were kept in a single pot, now called your vested pot. This included everything you had saved for retirement up until 31 August 2024. . The vested pot has closed, meaning no further contributions can be made to it.
The good news is that your vested pot remains invested and continues to grow with investment returns until you retire or leave your employer. Your options on how you take your vested pot from the fund is subject to the rules before 1 September 2024.
From 1 September 2024, all new retirement savings have been split into two pots:
- One-third goes into a savings pot, and two-thirds into a retirement pot.
- For example, for every R3 saved, R1 is allocated to the savings pot, and R2 to the retirement pot.
The new rules allow withdrawals from the savings pot without needing to leave your job or retire. However, withdrawals from the retirement pot are not permitted, as those funds must be used to provide income in retirement. These rules aim to help you balance the financial needs you have today with the financial needs you’ll have in the future when you retire.
Your financial future matters to us, and we want you to be in control
Even though the two-pot system will allow you to withdraw some cash, we recommend that you keep all your retirement savings invested for retirement where possible. This will give you the best chance of having enough money to live on one day when you stop working.
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Understanding your options or help making a decision based on your personal circumstances (advice):
Call Centre: 0860 896 768 | twopotqueries@alexforbes.com