GOOD news for retiring South African expats in 2025
The two-pot savings scheme offers retiring South African expats one big advantage over regular citizens. Retiring South African expats are able to access their two-pot savings immediately, thereby sidestepping the three-year lock-in rule.
As we've already reported, ever since the two-pot retirement system was introduced back in September 2024, fund member have withdrawn billions in funds. This is despite financial advisors decrying the long-term effects of saving efficacy. The scheme allows members to make one withdrawal from their savings pot every single year. Many are making lumpsum withdrawals to simply make ends meet or pay off debts. Which are clear signs of financial strain … Many retirees have worked their entire lives to live somewhere exotic like Mauritius when the turn 60. Image: File
Nevertheless, retiring South African expats are not subject to the same restrictive three-year lock-in rules that govern the savings portion of regular residents. Expats who have formally ceased tax residency can access their retirement savings without delay.
As such, the Retirement Matters Committee of the Actuarial Society of South Africa (ASSA) reports that 75% of applications in Q2 of 2025 were repeat claims. Up until February 2025, 2.6-million South Africans accessed part of their retirement savings. Therefore, it's plain to see that retiring South African expats are eager to obtain cash as soon as possible after ceasing tax residency.
Furthermore, the South African Revenue Service (SARS) says R47 billion has paid to fund members since the scheme's start on 1 September 2024. In turn, this yielded R12 billion in tax revenue for the government. Surprisingly, this is more than double the R5 billion initially projected by the National Treasury when it introduced the scheme.
However, something retiring South African expats should remember is their withdrawals – while not time limited – are not tax exempt. In fact, administrative withdrawal fees, and cross-border transfer regulations can make such transactions more costly. SARS insists that 'tax liability remains even after severing ties with the country.'
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
an hour ago
- IOL News
Reserve Bank's interest rate cut: response to low inflation and economic challenges
The South African Reserve Bank has lowered interest rates in response to a low inflation rate, but experts warn that rising taxes could still burden households. This article explores the implications of the rate cut and the ongoing economic challenges facing South Africa." Image: File The low inflation rate was the driver behind the South African Reserve Bank (Sarb) Governor Lesetja Kganyago lowering interest rates this past week. Kganyago announced that the central bank's Monetary Policy Committee (MPC) voted to decrease the repo rate from 7.50% to 7.25%. This means that the prime lending rate in South Africa has been lowered from 11% to 10.75%. Frank Blackmore, Lead Economist at KPMG told Business Report that the reason for this was the low inflation rate. Blackmore said, "The Reserve Bank remains data dependent in that respect, as well as the easing of some of the risks such as the exchange rate. Appreciation from the highs over R19, back down to around R18 to the dollar level and as well as the oil prices, which have remained low at this point. They have also taken into consideration that the Value Added Tax (VAT) hike will not take place, also eases future inflation in that respect." "An interesting analysis was also done by the MPC regarding an upside risk scenario if things worked in the other direction and South Africa would face a kind of stagflation scenario including weak economic growth and tight monetary policy reacting to higher levels of inflation, all caused by perhaps, the trade wars that are currently ongoing globally. Probably more interestingly another scenario where they're reducing the target rate from a current 4 1/2% objective, so the midpoint of the three to 6% range to the 3% objective so the bottom of their three to 6% range. This puts us closer in line with many of our trade partners as well as being closer to the median emerging market rate of around 3%," the economist said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading "In this situation, the benefits would also fall to all South Africans meaning that lower inflation would preserve the value of the earnings and wealth in future periods. Given the low inflation that we are currently experiencing this would be the right time to institute such a change," Blackmore further added. Neil Roets, CEO of Debt Rescue, told Business Report that the announcement of a BPS cut to the repo rate may be good news for economists, but will not shield South Africans from the burden of the fuel and sin tax levies that have been introduced by Finance Minister Enoch Godongwana within his Budget 3.0 projection. Roets warned that increased taxing of the workforce is not the answer, referring to the fuel-tax levy and raising sin taxes even higher, and will put further financial strain on households, driving them to new depths of despair. "This, at a time when they are buckling under the weight of multiple unsustainable inflation-related living costs. The reality is that the Finance minister's decision to impose new tax measures will hurt lower-income families most, as they will bear a proportionally higher burden, thus forcing them to make impossible lifestyle choices with the little disposable income they have left,' Roets said. Roets said that Kganyago is a longstanding advocate of shifting to a lower inflation target, arguing this would make the nation better placed to compete with its trading partners. 'A single-point target of 3% would be in line with South Africa's peers and lead to lower interest rates in the long term,' he has previously said. "His critics worry that reaching a lower inflation target would require tighter monetary policy however, that would cost growth and employment in a country with one of the highest jobless and poverty rates on earth. The Governor reiterated his view saying that the MPC is of the view that the 3% scenario is more attractive than the 4.5% baseline, and they would like to see inflation expectations move lower, towards the bottom end of their target range. He also said the MPC will consider scenarios with a 3% objective at future meetings," Roets said. A lower inflation target risks scuppering further interest rate cuts this year too, Investec Chief Economist, Annabel Bishop warned Bishop said, 'With a change to the inflation target reportedly occurring soon this year, the Sarb has chosen to cut interest rates this month to avoid the limitation of doing so in the future, but then could easily be at risk of needing to reverse the cut.' 'The reality is that the slow pace of the country's repo rate reductions is perpetuating the debt trap that millions of ordinary South Africans find themselves in, leaving millions with no option but to survive on credit,' Roets further said.
IOL News
3 hours ago
- IOL News
How deal was struck to save National Lottery from shutdown
Sizekhaya Holdings is led by a consortium that includes KwaZulu-Natal business figures such as Moses Tembe, former Chairperson of the KZN Growth Coalition, and Sandile Zungu, owner of AmaZulu football club. Image: Sihle Mlambo/IOL In tense, last minute discussions at the weekend, Trade, Industry, and Competition Minister Parks Tau intervened to prevent a shutdown of the popular National Lottery. Tau's intervention came after a high-stakes meeting on Saturday with the National Lottery Commission (NLC) and Ithuba, the current lottery operator. The situation arose after a Gauteng High Court ruled that Ithuba's operating license could only be extended for five months, until the new operator, Sizekhaya Holdings takes over. However the NLC had argued that a 12-month temporary license was necessary to ensure a smooth transition, but the court disagreed. However, in a surprise move, Tau announced that he had granted a 12-month temporary license to Ithuba Holdings, allowing them to continue operating the National Lottery from June 1 until the end of May next year - when Sizekhaya Holdings takes over as the operator. According to sources close to Tau, the minister promised Ithuba that they would not lose any revenue and would instead make a profit, although the details of how this would be achieved are not clear. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading "It was an intense meeting, and the minister knew what impact it would have on the country's economy given the scale of the tender and people relying on playing the lotto week in and week out," a source said. Ithuba had argued in court that if they accepted a five-month extension, they would incur a loss of R51 million. Ithuba has agreed to continue operating the National Lottery, ensuring that all games, draws, and prize payouts will proceed normally. The company has reassured the public that they will maintain their commitment to integrity, transparency, and the benefit of South Africans. "As a proudly 100% black-owned South African operator, Ithuba remains steadfast in its commitment to operate the National Lottery with integrity, transparency, and for the benefit of South Africans," the company stated on Saturday. While this agreement provides short-term relief, the long-term future of the National Lottery remains uncertain. Sizekhaya Holdings, the preferred bidder, is set to take over the lottery in June 2026, but questions remain about the transparency of the licensing process and the impact of further legal challenges. Announcing the preferred bidder Tau said he had received a report from the NLC regarding the satisfactory conclusion of negotiations with the preferred bidder for the Fourth National Lottery and Sports Pools Licence. 'I am pleased to announce that I have awarded Sizekhaya Holdings (RF) (Pty) Ltd ('Sizekhaya') the licence in terms of section 13 of the Lotteries Act 57 of 1997. As I indicated previously, I intended to announce the successful bidder on 28 May 2025 provided that the licence agreement negotiations with the preferred bidder were successfully concluded. I wish to thank the parties to the negotiations for completing their work in time. 'It is most unfortunate that this matter has already become the subject of litigation and a judgment of the High Court. I am seeking legal advice with a view to appealing against the judgment's findings and orders, and I reserve all my rights concerning this judgment. 'With due respect to the Honourable High Court, my announcement is the result of my undertaking made to the bidders and the Court before the hearing of the ends a long and difficult process of evaluating eight applications for the fourth licence. I appreciate that this has been an enormous and complex endeavour,' Tau said. On Sunday, Sizekhaya Holdings chairperson Moses Tembe, expressed his gratitude for being awarded the fourth lottery licence by the National Lottery "We welcome that the honourable Minister of Trade, Industry and Competition, Parks Tau appreciated the power of our vision. When the National Lottery was first mooted after the ushering in of our democracy, the most compelling argument for its existence was income it could generate to help the poorest and most vulnerable of South Africans," said Tembe. Tembe is a co-owner with Sandile Zungu, the owner of Amazulu Football. Ithuba had previously expressed disappointment at the decision to award the license to Sizekhaya Holdings, stating that they had invested significantly in developing the lottery infrastructure and had made significant contributions to good causes. "As a fully South African-owned and black-empowered operator, Ithuba Lottery has invested significantly in developing the first African central lottery system, owned and developed for Africa by South Africans," the company stated.
IOL News
4 hours ago
- IOL News
South Africa posts R14. 1bn trade surplus in April, down from March
South Africa recorded a preliminary trade balance surplus of R14.1 billion in April, the South African Revenue Service (Sars) reported on Friday, a decline from the revised R22.6bn surplus in March. The April surplus was driven by exports of R166.2bn and imports of R152.1bn, including trade with Botswana, Eswatini, Lesotho, and Namibia (BELN). However, the surplus was lower than the R24.8bn recorded in March, reflecting a month-on-month export decline of R4.3bn (-2.5%) and an import increase of R4.3bn (2.9%). Compared to April 2024, exports fell 4.0% from R173.2bn, while imports dropped 4.2% from R158.8bn. The year-to-date trade surplus (January to April 2025) stood at R39.7bn slightly below the R40.6bn surplus for the same period in 2024. Sars attributed the export decline to reduced shipments of grapes, gold, and iron ores and concentrates, while increased imports were driven by original equipment components, aeroplanes, and diamonds. BUSINESS REPORT Visit:
