Retirement Crisis Widens: 91% of Young South Africans Fall Short on Savings

Only 6% of South Africans retiring today have enough money to do so comfortably. That single figure, drawn from 10X Investments’ 2023/24 retirement reality report, sits at the center of a widening savings crisis that is hitting working young South Africans with particular force.

New research from Old Mutual’s Savings and Investment Monitor lays out the operational gap in stark terms. While 91% of working South Africans aged 18 to 29 say they understand the importance of savings goals and financial planning, only 46% are actually saving regularly. That is an 11-percentage-point drop from 2025, a single-year deterioration that signals accelerating pressure on household finances even among employed youth.

Additional reference context is available at https://www.businessday.co.za/economy/2026-07-13-why-young-south-africans-are-saving-less-despite-financial-goals/.

The day-to-day picture is harder still. More than half of surveyed Gen Z workers (56%) have dipped into their savings to cover basic daily expenses, a 10-point increase from the previous year. Nearly one in four (22%) have taken out loans to fund everyday spending. Financial stress among this cohort has climbed to 36%, up from 29% in 2025. Meanwhile, 43% of Gen Z respondents report belonging to the “sandwich generation,” simultaneously supporting both younger and older family members on incomes that are not keeping pace.

Income growth, the most direct lever for savings capacity, has slowed. The share of young people earning more than they did a year ago fell to 51% in 2026 from 55% in 2025. Combined with persistent inflation, that deceleration has created a structural squeeze on whatever disposable income might otherwise flow into savings.

John Manyike, Old Mutual group head of financial education, pushed back on the idea that this reflects poor financial character. “Generation Z is often seen as financially impulsive, but our research reveals a more complex picture. Young South Africans understand why saving and planning matter. However, ongoing economic pressure is leading many to prioritise today’s needs over tomorrow’s goals,” he said.

The pressure is not confined to young households. The South African Reserve Bank’s latest quarterly bulletin showed the national saving rate ticked up slightly to 14.9% of GDP in the first quarter of 2026, from 13.3% in the fourth quarter of 2025. Analysts expect that figure to fall again in the second quarter as rising living costs continue to bite.

Retirement savings carry the deepest structural weakness. Frikkie van Loggerenberg, CEO of Ifsa Asset Managers, described the problem as a combination of cultural and economic forces. “For South Africans in general, there is a bit of a lack of a savings culture. Everybody tries, but there’s not that 100% commitment to get to that point, and there’s not enough focus or commitment to retirement planning,” he told Business Day. “On the other hand, there is this economic pressure where things are getting more and more expensive each day, and people are battling. The income is battling to keep abreast with inflation.”

What changed the retirement savings landscape most recently was the two-pot retirement system, introduced in September 2024 to allow limited emergency access to retirement funds. By end-February 2026, the South African Revenue Service had approved R79.3 billion for withdrawal from savings pots, with 5.6 million people applying for tax directives. Proponents argue the system prevents workers in financial distress from resigning outright to access their full retirement savings. Critics see it differently.

Van Loggerenberg is direct about his skepticism. “On the research that we’ve done, if you have access to that savings pot, each and every year you will use that up. It’s a fact of life, and you get into that routine to do it. So that makes a huge impact on your long-term retirement savings that the money is there for,” he said. “I don’t think it was a good decision. I think that retirement money should stay retirement money and you should not have access to that till the day that you actually retire. That would alleviate a lot of the symptomatic problems that we’ve got, where only 6% of people that are retiring actually have enough for retirement.”

The consequences of that shortfall ripple outward. South Africans who retire without adequate savings must either continue working or depend on family support, which pushes financial responsibility onto the next generation and feeds directly back into the sandwich-generation burden that is already suppressing savings among workers aged 18 to 29.

The question that remains open is whether any combination of policy adjustment, wage recovery, and financial education can close the gap before another generation reaches retirement age without the resources to stop working.