The high cost of living is making it difficult for people to save with many resigned to working into old age or relying on government grants. (Flickr)
South Africans are not saving adequately for retirement, with many planning to depend on the government’s old-age grant and to work as long as possible beyond their 60s in order to survive financially.
This is according to the FNB 2025 retirement insights survey released on Tuesday which reveals the immediate challenges facing workers and the stark divide between their retirement dreams and financial preparedness.
It exposes deep-seated anxieties facing workers and retirees, indicating that only 10% of respondents plan to fully retire at 60. While 60% of South Africans under this age claim to have a retirement plan, financial pressures, procrastination and inadequate estate planning threaten their ability to achieve a secure future.
According to the survey, there has been a decline in retirement annuity contributions among middle-income earners from 51% last year to 34% in 2025 as debt and living costs take precedence.
The middle class, in particular, expressed uncertainty about saving adequately, with many delaying contributions or dipping into savings prematurely.
“The gap between expectations and outcomes must be urgently addressed,” said Lytania Johnson, the chief executive of FNB’s personal segment division.
“There is growing positive momentum in our industry and a visible shift from a ‘one day’ to a ‘day one’ mindset. We are seeing more South Africans recognising the need to plan and taking initial steps — but awareness without action won’t secure the futures that people want.”
According to the study, workers are starting to save at the age of 27 but many withdraw their retirement savings when they resign from their jobs to take up different posts.
FNB private segment chief executive Sizwe Nxedlana said there were emotional and behavioural barriers to retirement planning.
“What’s clear is that most people aren’t ignoring retirement, they are just overwhelmed by it. The survey found that procrastination often stems from not knowing where to start,” he said.
“We see that people don’t avoid planning because they don’t care. They avoid it because it feels too big, too far away or too confusing. That’s why we need to meet people where they are, with tools and advice that break things down and build momentum.”
The survey uncovers persistent anxieties about rising living costs, future healthcare expenses and the longevity of savings.
Younger respondents remain optimistic, expecting to replace 75% or more of their income in retirement, but older adults paint a bleaker picture. Many over-60s are working longer, cutting spending or relying on adult children, with some reporting isolation and regret over inadequate planning.
Estate planning also reveals concerning gaps. A total of 60% of respondents have funeral cover and just 40% have a signed will, while one-third have not considered drafting one, often due to myths that wills are only for the wealthy.
“Funeral cover is almost universal in South Africa because people want to ease the immediate burden on family. But a will does that too — and more. It’s not just for the wealthy. It’s about protecting your family in the long term,” Nxedlana said.
The introduction of the two-pot retirement system, allowing access to a savings portion of pension funds, has sparked mixed responses.
Nearly 70% of respondents are aware of the system, and almost half claim to understand it, but less than a third have withdrawn from their savings pot.
“The concern is that, while the reform offers short-term relief, the savings pot could be seen as a default emergency fund rather than a tool for building future stability,” Nxedlana said.
“However, there is some cause for cautious optimism, since 43% of those who haven’t withdrawn from their savings pot say they don’t plan to, which points to an understanding of keeping their retirement savings intact over time.”
The survey also signals a shift in retirement thinking, with over 50% of respondents expecting to supplement income through part-time work or side hustles.
“People aren’t just looking for products, they’re looking for options, guidance and a greater sense of control,” Nxedlana said.
“Bank platforms have surpassed social media and peer groups as the preferred source of retirement advice, with consumers demanding lower fees, user-friendly tools and better education.”
Another worrying concern the survey revealed was a tendency to rely on the government’s old-age pension, with 17% of respondents factoring this into their lack of retirement planning saying: “Government grants will provide for me.”