Two-Pot Retirement System

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South Africa’s two-pot retirement system started on 1 September 2024. New contributions are split so you can take a limited amount from a savings component before retirement, while most of the money stays locked for retirement. This page explains the three components and what they are for. It is not tax advice and it does not tell you to withdraw.

The three components

National Treasury’s two-pot FAQ describes three parts:

  • Savings component. From 1 September 2024, one-third of new contributions goes here. You may withdraw from it before retirement, subject to the fund’s process, a minimum of R2 000, and once per tax year. You do not have to withdraw every year. Money left in this component stays invested.
  • Retirement component. Two-thirds of new contributions go here. Treasury says this part cannot be accessed on resignation and is preserved until retirement.
  • Vested component. This holds what you had built up by 31 August 2024. It does not take new contributions, but it still earns fund returns. If you resign later, the old rules still apply to this component: Treasury says you may take it as cash, subject to tax, or transfer it.

The reform applies to active members of private- and public-sector funds, with exceptions. Treasury excludes old-generation or legacy retirement-annuity policies, funds with no active members, and some older provident-fund members who were 55 or older on 1 March 2021 and did not opt in. Ask your own fund which rules apply to you.

Seed capital is once-off, not an annual cap

At the start of the system, Treasury says 10% of the 31 August 2024 fund value, or R30 000, whichever is lower, moved into the savings component as seed capital. That transfer is once-off. It is not the most you may withdraw each year, and it is not repeated in later years.

Treasury’s worked examples: a R200 000 value on 31 August 2024 seeded R20 000. A R750 000 value seeded R30 000, because 10% would have been above the cap.

If you are deciding whether to withdraw

Treasury says the savings component is meant to help in financial difficulty and advises members to use it sparingly. A withdrawal is taxed at your marginal rate. There is no maximum on the savings-component amount itself, but the once-per-tax-year rule and the R2 000 floor still apply. Your fund, not this page, processes the claim and asks SARS for a tax directive.

SARS will not grant a two-pot tax directive without a valid tax reference number. Use the official SARS two-pot calculator on eFiling, the SARS MobiApp or the SARS Online Query System if you want an illustrative payout. That calculator is not a promise of what you will receive.

If you already used this tax year’s savings withdrawal and want the next ordinary date, see when you can claim again after 1 March. Ask your fund for its current process and timing. Funds do not all pay on the same day.

Questions people ask

When did the two-pot system start?

1 September 2024. It did not start on 1 March 2024.

Can I take everything when I change jobs?

Not the retirement component. Treasury says that part stays preserved. The vested component still follows the old resignation rules. The savings component can still be accessed under the savings-withdrawal rules.

Is the R30 000 seed the most I can take each year?

No. Treasury says the 10% or R30 000 figure is a once-off seed into the savings component, not an annual withdrawal limit.

Do I have to withdraw every year?

No. Unused savings-component money stays invested and can be taken in a later tax year, still subject to the once-per-year rule and the R2 000 minimum.

Can CodeCash tell me how much tax I will pay?

No. Use the official SARS two-pot calculator and your fund’s directive process. This page does not publish a tax table or a CodeCash calculator.

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